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8/2019 


FINAL FIRST DRAFT ANNUAL REPORT 

FOR 

ILEMBE DISTRICT MUNICIPALITY 

_ JULY 2018-JUNE 2019 

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Table of Contents 

CHAPTER 1: MAYOR'S FOREWORD AND EXECUTIVE SUMARY.6 

1.1 OVERVIEW BY HIS WORSHIP THE MAYOR.6 

1.2 FOREWORD BY THE MUNICIPAL MANAGER.10 

1.3 MUNICIPAL OVERVIEW.14 

1.4. DISTRICT FUNTIONS AND POWERS.31 

CHAPTER 2: GOVERNANCE. 32 

2.1. POLITICAL AND ADMINISTRATIVE GOVERNANCE.32 

2.2 INTERGOVERNMENTAL RELATIONS STRUCTURES.43 

2.3 CORPORATE GOVERNANCE.45 

2.4 PUBLIC ACCOUNTABILITY AND PARTICIPATION.53 

CHAPTER 3: SERVICE DELIVERY PERFORMANCE.61 

(PERFORMANCE REPORT PART 1).61 

3.1. PERFORMANCE MANAGEMENT PROCESSES.61 

3.1.1 PERFORMANCE AND SUPPORTING INFORMATION.64 

3.1.2 ORGANISATIONAL PERFORMANCE.64 

3.2 PERFORMANCE HIGHLIGHTS AS PER THE ORGANISATAIONAL SCORECARD 

AND NATIONAL KPA. 67 

3.3 CHALLENGES AND MEASURES TO IMPROVE PERFORMANCE AS PER THE 

ORGANISATIONAL SCORECARD AND NATIONAL KPA. 69 

3.4 BASIC SERVICE DELIVERY.71 

3.5 LOCAL ECONOMIC DEVELOPMENT.79 

.79 

3.6 MUNICIPAL FINANCIAL VIABILITY AND MANAGEMENT.82 

3.7 GOOD GOVERNANCE AND PUBLIC PARTICIPATION.87 

3.8 KEY AREAS TO NOTE.92 

3.9 PERFORMANCE OF SERVICE PROVIDERS.93 

CHAPTER THREE: SERVICE DELIVERY PERFORMANCE.95 

(PERFORMANCE REPORT PART 2).95 

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3.10 PROVISION OF BASIC SERVICE SERVICES IN THE 2018/19 FINANCIAL YEAR 

THE OBJECTIVE OF THE TECHNICAL SERVICES DEPARTMENT IS:.95 

3.11 LOCAL ECONOMIC DEVELOPMENT.109 

3.12 COMMUNITY SERVICES.110 

3.12.1 YOUTH, SPORTS, ARTS & RECREATION AND CULTURE.110 

(a) Sports And Recreation.110 

(b) Heritage And Cultural Programmes.Ill 

(c) Other Youth Empowerment And Development Programmes.Ill 

3.12.2 DISASTER RISK MANAGEMENT.112 

3.12.3 SPECIAL PROJECTS.124 

3.12.4 MUNICIPAL HEALTH SERVICES.127 

CHAPTER FOUR: ORGANISATIONAL DEVELOPMENT PERFORMANCE 
(PERFOMANCE REPORT PART 2).135 

4.1 INTRODUCTION AND OBJECTIVES OF THE DEPARTMENT.135 

4.2 ACHIEVEMENTS AND CHALLENGES.136 

4.3 THE MUNICIPAL PERSONNEL.140 

4.4 THE STAFF STRUCTURE.140 

4.5 EMPLOYEE TOTALS, TURNOVER AND VACANCIES.142 

6.6 MANAGING THE MUNICIPAL WORKFORCE.143 

4.7 POLICIES.145 

4.8 LEAVE MANAGEMENT.147 

4.9 OCCUPATIONAL HEALTH AND SAFETY INCLUDING INJURIES.149 

4.10 DISCIPLINE, AND SUSPENSIONS.150 

4.11 CAPACITATING THE MUNICIPAL WORKFORCE.150 

4.12 LABOUR RELATIONS.151 

4.13 IGR: CORPORATE SERVICES FORUM.151 

4.14 MANAGING WORKFORCE EXPENDITURE.152 

CHAPTER 5: FINANCIAL HEALTH OVERVIEW.153 

5.1 INTRODUCTION.153 


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5.2 GOVERNANCE: LEGISLATIVE/REGULATORY STRUCTURE AND 
MANAGEMENT STRUCTURE. 


153 


5.3 iLEMBE DISTRICT MUNICIPALITY’S RELATIONSHIP WITH OTHER ENTITIES 

THAT COULD AFFECT ITS FINANCIAL POSITION, FINANCIAL PERFORMANCE AND 
CASH FLOWS.155 

5.4 EXTERNAL TRENDS, EVENTS AND DEVELOPMENTS IN LEGAL, 

REGULATORY, SOCIAL, POLITICAL AND MACRO-ECONOMIC ENVIRONMENT THAT 
IS SPECIFIC TO THE ILEMBE DISTRICT MUNICIPALITY WHICH HAVE OR MAY HAVE 
A SIGNIFICANT IMPACT ON ITS FINANCIAL POSITION, FINANCIAL PERFORMANCE 
AND CASHFLOWS.156 

5.5 MAIN OPERATIONS INCLUDING SERVICE DELIVERY METHODS AND 

SIGNIFICANT CHANGES.159 

5.6 FINANCIAL VIABILITY OBJECTIVES AND STRATEGIES.159 

5.7 ANALYSIS OF ILEMBE DISTRICT MUNICIPALITY’S FINANCIAL STATEMENTS 

INCLUDING SIGNIFICANT CHANGES AND TRENDS IN THE FINANCIAL POSITION, 
FINANCIAL PERFORMANCE AND CASHFLOWS.162 

5.8 THE PRINCIPAL RISKS AND UNCERTAINTIES THAT AFFECT ITS FINANCIAL 
POSITION, FINANCIAL PERFORMANCE AND CASH FLOWS, CHANGES SINCE THE 


LAST REPORTING DATE AND ITS STRATEGIES FOR BEARING OR MITIGATING 
THOSE RISKS AND UNCERTAINTIES.173 

CHAPTER 6: AUDITORS GENERAL AUDIT FUNDINGS. 175 

COMPONENT A-AUDITOR GENERAL’S OPINION OF THE FINANCIAL STATEMENTS 
2018/19.175 

COMPONENT B: CONSOLIDATED AUDIT RESPONSE PLAN OF ILEMBE DISTRICT 
MUNICIPALITY AND ITS ENTITY: 2018/19.184 

COMPONENT C: REPORT OF THE AUDIT COMMITTEE TO THE COUNCIL OF 
ILEMBE DISTRICT MUNICIPALITY FOR THE YEAR ENDED 30 JUNE 2019. 197 

CONSUMER DEBTOR ARREARS.202 

CONSOLIDATED AUDITED ANNUAL FINANCIAL STATEMENTS.203 

GLOSSARY.260 

APPENDICES:.261 

• ORGANISATIONAL SCORECARD FOR THE YEAR 2018/2019.262 


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• OFFICE OF THE MM: 2018/2019 SERVICE DELIVERY AND BUDGET 

IMPLEMENTATION PLAN.264 

• TECHNICAL SERVICES DEPARTMENT: 2018/2019 SERVICE DELIVERY AND 

BUDGET IMPLEMENTATION PLAN.268 

• FINANCE DEPARTMENT: 2018/2019 SERVICE DELIVERY AND BUDGET 

IMPLEMENTATION PLAN.277 

• CORPORATE SERVICE DEPARTMENT: 2018/2019 SERVICE DELIVERY AND 

BUDGET IMPLEMENTATION PLAN.280 

• COMMUNITY SERVICES DEPARTMENT: 2018/2019 SERVICE DELIVERY AND 

BUDGET IMPLEMENTATION PLAN.284 

• ENTERPRISE ILEMBE: 2018/2019 SERVICE DELIVERY AND BUDGET 

IMPLEMENTATION PLAN.287 

• ENTERPRISE ILEMBE 2018/2019 ANNUAL REPORT.290 

. ENTERPRISE ILEMBE: 2018/2019 AUDITED ANNUAL FINANCIAL 
STATEMENTS.340 


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CHAPTER i; MAYOR’S FOREWORD AND EXECUTIVE SUMARY 


1.1 OVERVIEW BY HIS WORSHIP THE MAYOR 

It is a great honour for me to present the Annual Report of the iLembe District Municipality for 
the year ending on 30 June 2019. 

The purpose of the annual report is to provide a record of the activities of the Council during 
the financial year, provide a report on performance against the budget of the iLembe Council 
for the financial year reported on as well as to promote accountability to the local community 
for the decisions made throughout the year by the Municipality. It is thus aimed at providing 
all citizens and stakeholders who have an interest in the iLembe District Municipality an insight 
into the workings of this organisation. 

Following the strategic planning session of the iLembe District Municipality for the 2016 - 2021 
period which was held between the 24 th and the 27"' of October 2016, where relevant 
stakeholders deliberated on ways to overcome the prevailing challenges and chart a path for 
developing and growing the District over the next five years and beyond, a shared vision i.e. 
Vision 2030 was set taking into account national and provincial priorities as well as the 
development visions of the constituent local municipalities. 

“BY 2030 ILEMBE DISTRICT MUNICIPALITY WILL BE A SUSTAINABLE PEOPLE 
CENTRED ECONOMIC HUB PROVIDING EXCELLENT SERVICES AND QUALITY OF 
LIFE”. 

In presenting this Annual Report, the municipality is proud to set out our performance 
highlights and financial management. The report is published in terms of the requirements of 
the Municipal Finance Management Act No. 56 of 2003 which requires municipalities to report 
on all aspects of performance, providing a true, honest and accurate account of the goals set 
by Council and our successes, including any hindrances towards achieving these goals. 

Our five-year strategic plan is aligned to the national KPAs and PGDs and our organisation 
scorecard as indicated above continues to be organised according to the five prescribed 
national Key Performance Areas which are; 

• Municipal Transformation And Institutional Development 

• Local Economic Development And Planning 




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• Basic Service Delivery 

• Financial Viability And Management 

• Good Governance And Public Participation 

We are proud to acknowledge the collective effort of our leadership, employees, service 
delivery partners and all citizens who contributed to transforming the municipality into a 
cohesive institution that is able to deliver on its core mandate. 

iLembe is still continuing to embark on vigorous implementation of the Back to Basics (B2B) 
approach which was launched by the our former State President in 2014. This was done in an 
effort to recognise and adequately reward good performance and ensure sufficient 
consequences for under-performance. Our municipality has maintained its status of functional 
in its implementation of the B2B approach. This indicates that there is good political stability, 
governance, service delivery, financial management, institutional management and 
community satisfaction in the District. iLembe District Municipality’s overall performance was 
good with 76% of our targets being met, with 24% not being met by the end of June 2019. 

MUNICIPAL TRANSFORMATION AND INSTITUTIONAL DEVELOPMENT 

During 2018/19 financial year, the vacancy rate was originally at 22,1 % but as council we took 
a decision that our Human Resources Unit must embark on a process of prioritizing posts in 
order to ensure alignment with the budget affordability, and in line with our austerity measures. 

LOCAL ECONOMIC DEVELOPMENT AND PLANNING 

Enterprise iLembe continues to improve co-ordination of Local Economic Development in the 
District including the upscaling of agriculture, capitalising on tourism potential, increasing 
manufacturing output and ensuring job creation. 

iLembe District is committed to creating an enabling environment that will see the growth and 
emancipation of the local emerging entities owned by black people. During this period, we are 
also reporting on the Enterprise iLembe (El) having introduced SMME support strategies to 
assist local SMMEs who are in great need of support structure and awareness about the 
available options for them in order to enable growth of their businesses. Through its LED 
function, El remains responsible for the support and incubation of the emerging entities 
through allocating work using our own procurement systems. This will take our objectives a 
step further towards the realization of economic empowerment of our previously 
disadvantaged individuals. 


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BASIC SERVICE DELIVERY 

As iLembe District we are proud of the achievements made in the delivery of basic services to 
our people. In terms of the targets that were set for 2018/19 financial year, 1099 households 
were targeted for connection to water services with 1604 households connected, and this was 
an over achievement since the actual percentage is 146 %. Again, 1800 households were 
targeted for connection to sanitation, but only 1361 households were connected, which makes 
for a percentage of 76%. Overall, a lot of our communities (especially in our rural municipalities 
of Maphumulo, Ndwedwe and Mandeni), benefitted immensely in our water and sanitation 
programmes during the period under review. 

We recognise the challenges that are being experienced with regard to the provision of water 
and sanitation, and are therefore working tirelessly towards implementing measures to 
improve our performance. The issue of water losses remains a cause for concern as it was at 
62% during the 2018/19 financial year. The municipality is implementing a number of 
interventions towards ensuring that the issue of water losses, including the development of a 
five-year strategic master plan for the reduction of non-revenue water, which has been 
adopted by the municipality to address this problem. 

In terms of the 2018/2019 Performance Rating for Service Providers, there has been a 
significant improvement as compared to the previous financial year since the rating for 
Umngeni Water and Gledhow Sugar is both at an acceptable level (good), with Sembcorp 
Siza Water rated to be very good during the period under review. 

FINANCIAL VIABILITY AND MANAGEMENT 

iLembe District Municipality, and its entity (Enterprise iLembe) both obtained unqualified audit 
opinions with findings during 2018/2019 financial year. The average number of days taken for 
trade creditors to be paid is at 47 days when compared to the target of 30 days. The cash flow 
position of the municipality continues to be constrained given the persisted poor collection rate 
particularly from historical debt. The revenue collection for 2018/19 financial year was 64%, 
as compared to the set target of 75%. Management and Council are working vigorously to turn 
the situation around by means of strengthening the credit control and collection measures, 
implementing stringent cash flow monitoring, including revamping and re-enforcing control 
measures at the Stores Department, and these are some of the measures that are 
implemented. 




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GOOD GOVERNANCE AND PUBLIC PARTICIPATION 

Community Services remains one of our core functions as the district, and through this function 
we have been able to get involved in activities that are entirely community based and are 
directed towards creating awareness to improve the lives of our communities through 
education campaigns and celebratory events in collaboration with communities, sector 
departments, non-governmental organisations, and relevant stakeholders. 

Public Participation remains an important pillar of our democracy. As stipulated in the 
legislative framework governing local government, the municipality has undertaken various 
initiatives to ensure an informed and active citizenry. A total number of forty two (42) planned 
public participation meetings were held, with 100% of meetings requested also conducted 
during the process. 


The achievements and resourceful service delivery programmes presented in this annual 
report are all due to the hard work and dedication by iLembe District Municipality, particularly, 
Councillors and employees. 


I would like to extend my gratitude to the Municipal Manager and the entire team of officials 
who are central in the execution of our vision and we commit ourselves to continue reaching 
for greater heights as we move forward. 




His Worship the Mayor 
Cllr S.S. Gumede 
Date: 04 February 2020 


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1.2 FOREWORD BY THE MUNICIPAL MANAGER 


In keeping with Section 46 of the Local Government Municipal Systems Act, No. 32 of 2000 
(as amended), Section 127 (2) of the Local Government Municipal Finance Management Act, 
No. 56 of 2003, as well as accompanying circulars, templates and guidelines, we are duty 
bound to prepare an Annual Report for the 2018/2019 financial year. In particular, MFMA 
Circular No. 63, issued in September 2012, added guidance to the preparation of this annual 
report, requiring all municipalities to report within the established framework and for such 
reports to be submitted to the Auditor General at the same time as the Annual Financial 
Statements in August each year. 

According to the MFMA, this Report should include: 

(a) The annual financial statements of the Municipality, and consolidated annual 
financial statements, submitted to the Auditor-General for audit in terms of section 126 
(1) of the MFMA 

(b) The Auditor-General’s audit report in terms of section 126 (3) of the MFMA and in 

accordance with s45 (b) of the MSA; on the financial statements in (a) above; 

(c) The annual performance report of the Municipality as prepared by the iLembe 
District Municipality in terms of section 45(b) of the Local Government: Municipal 
Systems Act 32 of 2000 (MSA); 

(d) An assessment of the arrears on municipal taxes and service charges; 

(e) An assessment of the Municipality's performance against the measurable 
performance objectives referred to in Section 17 (3) (b) of the MFMA for revenue 
collection from each revenue source and for each vote in the Municipality’s 
approved budget for the financial year 

(f) Corrective action taken in response to issues raised in the audit reports referred to 

in paragraphs (b) and (d); and 

(g) Recommendations of the Municipality’s Audit Committee 

As a district, we are faced with a number of challenges, relating to the non payment of services. 
To date, we have not seen a significant improvement on the debt of over R 270 million that is 
owed to us by residents on the services that we render to them. 

The effect of non-payment has a negative impact on the cash flow of the Municipality and 
negatively affects financial viability. Non-payment directly impacts the day to day operations 
of the municipality as we have limited revenue to fund operational expenditure and internally 
funded capital projects. 


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With the wisdom and unwavering support of our political leadership, as management we were 
able to do all we could do to sail through the challenges. This includes amongst other things 
the door-to-door revenue enhancement campaigns (Thuma Mina Campaigns) we have held 
in most of our local municipalities. These campaigns seek to encourage local communities to 
pay for municipal services and plans are underway to ensure that these campaigns are 
conducted on an ongoing basis. 

This report records the performance and progress made by iLembe District Municipality in 
fulfilling its strategic objectives as contained in the Integrated Development Plan (IDP), 
Institutional Scorecard and Service Delivery and Budget Implementation Plan (SDBIP) 
approved by Council during the period under review. The 2018/2019 financial year also saw 
us enjoy a string of successes from an administrative perspective. We are also required to 
report on the performance of the municipality’s entity, which is iLembe Enterprise for which 
we have total ownership. 

As leadership and management we are content with the level of improvement in the manner 
in which we live up to the promise of delivering services to our people. Of course this is limited 
to the powers and functions that are allocated to the District Municipality as well as the limited 
financial and technical resources and other factors that have a bearing on our ability to deliver 
services to our people. 

FINANCIAL PERFOMANCE 

Financial Viability remains a priority amongst the organizational strategic imperatives. The 
financial year under review was not different from other financial years in terms of placing a 
dedicated focus on how the financial situation of the Municipality can be turned around from 
the historic turbulent position into a more stable one. As we are closely approaching the four 
year of implementing the financial turnaround strategy that was adopted by Council back 
December 2016, it is indeed encouraging to report remarkable achievement in certain critical 
areas though we are very mindful of those that remain a challenge. 

One of the key areas Council had set itself to prioritize implementing was the issue of budget 
control. It is pleasing that as we speak, the Municipality has constantly maintained fully cash 
funded budget over the past three financial years. While this control is in place, the Municipality 
has been able to manage its budget efficiently, resulting in 94% of budget spent in expenditure 
(capital and operational combined). Approximately 67% of capital budget was spent on agreed 
IDP projects with the balance of budget not spent mainly as a result of bid objections that the 
Municipality had to deal with through the requisite SCM processes. 


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While liquidity still remains one of the major challenges that the Municipality still has to contend 
with, the situation is improving, with 37 days cash on hand reported for the 2018/19 financial 
year compared to the 30 days cash on hand reported in the previous year. We are projecting 
that this trend of improvement will continue into the upcoming financial years. 

Two areas that remain the greatest challenge for the Municipality is the debt collection rate 
and the inability to pay suppliers on time at certain times. On average, it took the Municipality 
47 days to pay suppliers during 2018/19 financial year against a target of 30 days from date 
of receiving an invoice. In the same period, the Municipality’s debt collection rate stood at 64% 
against the set target of 75%. The Management is working tirelessly to improve on these and 
other areas where we have not done well. 


RECOGNITION OF ILEMBE DISTRICT MUNICIPALITY BY CIGFARO 

As a municipality, we continue to strive for excellence, having being recognised previously by 
KZN Cogta for producing credible IDP’s. The period under review was no exception as iLembe 
District received an award as the Best Performing Municipality by CIGFARO (Chartered 
Institute Of Government Finance, Audit And Risk Officers), which is a credible body. 

Public engagements were held with the communities of the respective local municipalities to 
engage them on their needs and the approval of the budget during October/November 2018 
and April/May 2019. 

A number of these roadshows were attended by His Worship, the Mayor, Cllr Siduduzo 
Gumede, EXCO members, fellow councillors and myself as the Municipal Manager. All 
sectors, including Amakhosi, religious and business leaders, were also consulted during this 
critical process. 

In line with the call by the State President of our country, we have continued to conduct a 
number of Thuma Mina Campaigns in our communities, and that have been hailed as a huge 
success. As iLembe District Municipality, we encourage all of our residents and ratepayers 
from our beautiful district to pay for services, whilst continuing to be the agents of change for 
the betterment of all communities. 


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TOP FIVE (5) STRATEGIC RISKS FACING THE MUNICIPALITY DURING 2018/2019 
FINANCIAL YEAR 

It is important to mention that to ensure the long term sustainability of the municipality, as a 
collective, we need to deal with the top five risks that have been identified. Below are the top 
5 strategic risks that have been identified during the period under review: 

• Business Support: Lack of communication with Stakeholders and communities; 

• Strategy: Inappropriate Corporate Culture; 

• Health and Safety Management: Inadequate Occupational Health & Safety (OHS) 
systems; 

• Technical Services: Scarce raw water sources; and 

• Service Delivery: Violent Public Protest. 

There is a strong political and administrative will to deal with the above mentioned risks, as 
there a mitigation strategies that have been put in place and are being closely monitored by 
our Enterprise Risk Management Unit working closely with the entire management team. 

In conclusion, I would like to thank our political leadership, management team and all our 
employees for their hard work and continued commitment in ensuring that iLembe District 
Municipality deliver on its obligations and commitment to the people of South Africa. I look 
forward to another year in which we will continue to build on our achievements and work 
together to find innovative ways to overcome our challenges and ensure that we continue to 
serve our people as required by the Constitution. 



Mr. NG Kumalo 
Municipal Manager 
Date: 04 February 2020 


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1.3 MUNICIPAL OVERVIEW 


1.3.1 ILEMBE DISTRICT MUNIQIPALITY PROFILE 

The iLembe District Municipality (DC29) lies on the east coast of KwaZulu-Natal, between 
eThekwini Metro in the south and King Cetshwayo District in the North. To the west, iLembe 
is bordered by two Districts; uMgungundlovu and uMzinyathi. At 3 260km 2 , this is the smallest 
of the 10 KZN District Municipalities with a total population of approximately 657,612 people 
(Statics SA Community Survey 2016). iLembe District is constituted by four Local 
Municipalities; Mandeni, KwaDukuza, Ndwedwe and Maphumulo. See map 1 for an Overview 
of the iLembe Region. 

iLembe is located between two of Africa’s busiest ports, Durban and Richards Bay, on the 
primary economic development corridor in the province, and is therefore well positioned not 
only to local, but also international markets, the King Shaka International Airport and the Dube 
Trade Port, just a few kilometres from the southern border of iLembe, have amplified what was 
already a prime investment destination. The District is made up of 45 Traditional Authorities 
(TA) areas where settlement is controlled by TA according to a traditional land tenure system. 
These TA areas cover approximately 63% of the total area of iLembe; where the Ingonyama 
Trust own the majority of the land within the municipality of Maphumulo, the lower reaches of 
Ndwedwe (69%) and coastal and inland reaches of Mandeni (49%). 

The northern areas of Ndwedwe, the central corridor of Mandeni and KwaDukuza Municipality 
are the commercial farming hubs of the District. The commercial farming areas of KwaDukuza, 
Mandeni and Ndwedwe (31 % of the iLembe District) are mainly under privately owned sugar 
cane. Areas of urbanisation in the District comprise of KwaDukuza, Mandeni, the Dolphin 
Coast and Nkwazi Land uses within these areas are typically urban mixed uses with high 
levels of infrastructural and service development and an adequate provision of social facilities 
and services to support the resident populations. Industrial development is concentrated in 
KwaDukuza, IsiThebe and Darnall, most notably the Gledhow and Darnall sugar milling 
operations at Stanger and the Sappi Paper mills at Mandeni. 

Informal settlements with limited facilities or infrastructural services occur on the periphery of 
the developed areas and within the towns of iLembe. Village centres such as Maphumulo and 
Ndwedwe in the west, Nyoni and Mbizimbelwa in the north, comprise of commercial and 
service development in the rural areas. They largely exist in association with a magistrate’s 

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court, clinic, pension pay point, health, education and welfare office or similar state service. 
Wholesale commercial activities have expanded and these villages have emerged as supply 
centres and transportation hubs to the remote rural areas of iLembe. 

Despite its strategic location, iLembe faces numerous economic challenges such as the high 
levels of poverty in the rural inland areas, which contrasts with rapid development along its 
coastal regions. The District has been proactive in developing Enterprise iLembe, a broad 
based institution aimed at facilitating local economic development in response to its challenges 
of high rates of unemployment and correspondingly high levels of poverty. 

1.3.2 ILEMBE DISTRICT MUNICIPALITY'S 5 YEAR STRATEGIC PLAN ALIGNED TO 
THE NATIONAL KPAS AND PGDS 

Section 25 of the Municipal Systems Act states that each municipal Council must, after the 
start of its elected term, adopt a single, inclusive and strategic plan for the development of the 
municipality. Considering this, iLembe District embarked on a process to review and refine its 
plans in the context of changing needs and new developments. 

iLembe Strategic Planning session took place on 24 - 27 October 2016, to reflect on the 
challenges, performance and progress of development initiatives of the previous term of office, 
consolidate implementation plans for projects, programmes and pave the way for crafting the 
new five year, 2017-2022 Integrated Development Plan (IDP) with the current Council. 

The table below illustrates iLembe’s 5 Year strategic objectives aligned to the 14 National 
outcomes, PGDS and iLembe’s DGDP, as follows: 

MUNICIPAL VISION 

The current Council assumed office in August 2016 after the local government elections and 
opted to develop a new vision as follows: 


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"By 2030 iLembe District Municipality will be a sustainable people-centred economic hub 
providing excellent services and quality of Ufa" 


ILEMBE DISTRUST MUNICIPALITY 1 ® ® YEAR STRATEGIC* PLAN ALIGNMENT TO THE 

NATIONAL KPAS AND PODS 


KPA 1-s MlPlStKlPAL THANSFORMATION & INSTITUTIONAL DEVELOPMENT 


IDPREF. 

NATIONAL 

OUTCOME 

PGDS GOALS 

ILEMBE DGDP 

PRIORITY 

S YEAR STRATEGIC OBJECTIVE 

MTI01 

4: Decent 

Employment Through 

1: Inclusive 

Economic Growth 

Effective 

Governance, 

To establish an efficient and productive 
administration 

MTI02 

Inclusive Economic 

Growth 


Policy and 

Social 

To ensure a sustainable and healthy 
environment 

MTI03 

S; A Skilled And 

2: Hu man Resource 
Development 

Partnerships 

To provide and maintain an effective 
Document Management System 

MTI04 

Capable Workforce 

To Support An 



To ensure effective governance through 
regular Council meetings 

MTI05 

Inclusive Growth 

9: Responsive, 


i 

To provide legal advice and ensure 
resolution of legal matters against and/or 
on behalf of the municipality 

MTI06 

Accountable, 

Effective And Efficient 
Local Government 


i 

Jo provide an innovative, effective and j 
efficient Information and Communication ! 
Technology service. 

KPA 2: LOCAL ECONOMIC DEVELOPMENT (LEO} & PLANNING 

IDP REF. 

NATIONAL 

OUTCOME 

PGDS GOALS 

ILEMBE DGDP 

PRIORITY 

5 YEAR STRATEGIC OBJECTIVE 

LED01 

4:Decent 

j employment through 

1 inclusive 
economic growth 

A diverse and 
growing 

To improve co-ordination of LED in the 
District 

LED02 

inclusive economic 
growth 

3:Human & 

economy, 

promote 

To upscale Agriculture development in 
the district 

LED03 

6:An efficient. 

Community 

Development 

social well 

being 

To capitalize on tourism potential of the 1 
District 

LED04 

competitive and 
responsive economic 

5: Spatial Equity 


To increase Manufacturing output within 
the district. 

LED05 

infrastructure 



To ensure job creation 

LED06 

network 

6; Environmental 
Sustainability 


To create an ICT platform available to 
everyone 

LED07 

7:Vibrant, equitable 
and sustainable rural 
communities and 
food security for all 



To facilitate co-ordinated planning and 
development 

KPA 3: BASIC SERVICE DELIVERY 

IDP REF. 

NATIONAL 

OUTCOME 

PGDS GOALS 

ILEMBE DGDP 

PRIORITY 

5 YEAR STRATEGIC OBJECTIVE 

. 

BS01 

8: Sustainable 
human settlements 
and improved quality 

1: Inclusive 

economic growth 

Equity of 

access 

To ensure access to potable water for 1 
domestic consumption and support local 
economic development 

BS02 

of household life 

9; Responsive 

4: Strategic 

Infrastructure 

A liveable 

region 

To ensure access to basic sanitation for 
domestic purposes and support local 
economic development 

BS03 

accountable. 



Monitor Siza Water concession contract 


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BS04 

effective and efficient 
local government 
system 



Create job opportunities through 
Infrastructure Project 


KPA4: FIJjANCIALyiA.BilLITy^MANAGEiyjEjNT 1 

IDP REF. 

NATIONAL 

OUTCOME 

PGDS GOALS 

ILEMBE DGDP 

PRIORITY 

5 YEAR STRATEGIC OBJECTIVE 

FV01 

9: Responsive 
accountable , 
effective and efficient 
local government 
system 

7: Governance and 
Policy 

Effective 
governance, 
policy and 

social 

partnerships 

L.. 

To ensure sound revenue management 

FV02 

To ensure sound budgeting and 
compliance principles 

FV03 

To ensure sound expenditure 

management 

FV04 

To procure quality goods and services in a 
cost effective, transparent, competitive, 
equitable and efficient manner within the 
policy framework 

FV05 

To maintain a clean audit opinion 

FV06 

To ensure sound and effective asset 
management 

KPA 

5: Ji sj; 

CE & PUBLIC PARTICIPATION 

IDP REF. 

1 ■' 

NATIONAL 

OUTCOMES 

PGDS GOALS 

ILEMBE DGDP 

PRIORITY 

5 YEAR STRATEGIC OBJECTIVE 

GP01 

9: Responsive 
accountable, 
effective and efficient 
local government 
system 

12: An efficient , 
effective and 
development 
orientated public 
servtce and an 
empowered , fair and 
inclusive citizenship 

7; Governance and 
Policy 

3: Human and 

Community 

Development 

. 

■ 

! 

■ 

. 

Promote social 

well-being, 

effective 

i 

governance, 
policy and j 

social 

partnerships & : 
a liveable 

region 

To strengthen partnership with various 
stakeholders through communicating 
municipal business 

GP02 

i 

« 

To promote accountability and deepen 
democracy through capacitating the 
community to participate and support 
municipal business. 

GP03 

To ensure prevention and mitigation 
against disasters 

GP04 

To improve the quality of life within the 
district 

GP05 

To preserve our History and heritage 

GP06 

Compliance and good Governance 

GP07 

To provide independent, objective 
assurance and consulting services 
designed to add value and improve the 
municipality's operations. 

GP08 

To implement and maintain compliant, 
effective and efficient enterprise risk 
management systems and processes. 

GP09 

To improve the quality of life within the 
district 

GP010 

To ensure effective Organisational 
Performance Management 

GP011 

To ensure that the entity administration 
is governed by the sound and effective 
values and principles as outlined in the 
constitution of South Africa 


Table 1: strategic objectives 


1? 




































































1.3.3 GOVERNMENT PRIORITIES 


(a) SUSTAINABLE DEVELOPMENT GOALS (SDG) 

At an International level, the Sustainable Development Goals are one of the many United 
Nations initiatives that guide constituencies on what standards to strive for in terms of people’s 
needs, the environment and other important factors. They serve as a successor to the 
Millenium Development Goals. They include 17 goals and 169 targets that capture the global 
aspirations for sustainable development. The municipality’s IDP is to some extent aligned with 
these goals that were adopted in September 2015. The National Development Plan and the 
Provincial Growth and Development Strategy, to which the iLembe IDP is aligned, have 
devised interventions that respond to the 17 goals. The current Council has developed this 
five year IDP that include strategies on how the municipality will be contributing to each of the 
Sustainable Development Goals between 2017 and 2022. Chapters 3 and 6, contains 
strategies and projects that link to the SDGs as they appear in the figure below: 


SUSTAINBIE DEVELOPMENT GOALS 


1 

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1 





FIGURE 1: SUSTAINABLE DEVELOPMENT GOALS 


SDGS 

SDG 1: End poverty in all its forms everywhere 

SDG 2: End hunger, achieve food security and 
improved nutrition and promote sustainable 
agriculture 


IDM RESPONSE 

• SMME Support programmes by Enterprise 
iLembe; and 

• Operation Sukuma Sakhe interventions. 
Various agricultural projects implemented by 
Enterprise ILembe, including: 

• Small holdings farmer support; 


18 


4 n 























SDG 3: Ensure healthy lives and promote 
wellbeing for all at all ages 


SDG 4: Ensure inclusive and equitable quality 
education and promote lifelong learning 
opportunities for all 

SDG 5: Achieve gender equality and empower all 
women and girls 


SDG 6: Ensure availability and sustainable 
management of water and sanitation for all 

SDG 7: Ensure access to affordable, reliable, 
sustainable and modem energy for all 
SDG 8: Promote sustained, inclusive and 
sustainable economic growth, full and productive 
employment and decent work for all 
SDG 9: Build resilient infrastructure, promote 
inclusive and sustainable industrialization and 
foster innovation 

SDG 10: Reduce inequality within and among 
countries 

SDG 11: Make cities and human settlements 
inclusive, safe, resilient and sustainable 

SDG 12: Ensure sustainable consumption and 
production patterns 

SDG 13: Take urgent action to combat climate 
change and its impacts 


• National Schools Nutrition Programme; and 

• Hydroponic Tunnel projects. 

• Projects and programmes from the department of 
health included in Chapter 8; and the 
municipality is implementing various sporting 
programmes aimed at youth, senior citizens and 
people with disabilities. 

• Projects and programmes from the department of 
Education included in Chapter 8 of the IDP.; 

• Implementation of the municipality's Workplace 
Skills Plan; and 

• Implementation of the municipal Bursary Policy. 
The municipality is implementing various gender 
equality programmes to empower women, such as; 

• Implementation of the Municipal Equity Plan; 

• Take a Girl Child to Work Day initiative; 

• Teenage Pregnancy Awareness Campaigns; and 

• Women’s Parliament. 

The municipality is implementing various water 
infrastructure projects to ensure availability of water, 
these are included in Chapter 6 of the IDP. 

• Eskom projects under Chapter 7 of the IDP. 

• Enterprise iLembe programmes. 

The municipality is implementing various water 
infrastructure projects to ensure availability of water, 
these are included in Chapter 6 of the IDP. 

N/A 

The municipality, through water and sanitation 
infrastructure projects is facilitating the establishment 
of sustainable human settlements. 

• The municipality is currently piloting a Recycling 
programme; and 

• Development of an Integrated Waste 
Management Plan. 

The municipality will be developing a Climate 
Change Response Strategy. 


19 



SDG 14: Conserve and sustainably use the 
oceans, seas and marine resources for 
sustainable development 

SDG 15: Protect, restore and promote sustainable 
use of terrestrial ecosystems, sustainably manage 
forests, combat desertification, and halt and 
reverse land degradation and halt biodiversity loss 
SDG 16: Promote peaceful and inclusive societies 
for sustainable development, provide access to 
justice for all and build effective, accountable and 
inclusive institutions at all levels 

SDG 17: Strengthen the means of implementation 
and revitalise the global partnership for 
sustainable development. 

Table 2: ILembe's Response To SDG'S 


The two coastal Local Municipalities, KwaDukuza 
and Mandeni, have developed Coastal Management 
Plans. 

The municipality has concluded a Wetland 
assessment and the draft action plan is included as 
part of the municipal IDP. 

The municipality has various measures in place such 
as the: 

• Anti-Fraud and Corruption Policy and Strategy; 

• A functional external audit committee; 

• A functional risk management committee; etc. 

The municipality has partnered with various 
international organisations, including SECO 
(Switzerland) and ICLEI on economic development 
and environmental management programmes, 
respectively. 


(B) MEDIUM TERM STRATEGIC FRAMEWORK 


MTSF OUTCOMES I DM RESPONSE 

1. Improve the quality of basic education Department of Education 


2. A long and healthy life for all South Africans 


3. All people in South Africa are and feel safe 

4. Decent employment through inclusive economic 
growth 

5. A skilled and capable workforce to support an 
inclusive growth 


6. An efficient, competitive and responsive 
economic infrastructure network 


Projects and programmes from the department of 
health included in Chapter 8; and the municipality 
is implementing various sporting programmes 
aimed at youth, senior citizens and people with 
disabilities. 

South African Police Service 
Department of Economic Development; 
Department of Trade and Industry; and 
Enterprise iLembe. 

Projects and programmes from the department of 
Education included in Chapter 8 of the IDP.; 
Implementation of the municipality's Workplace 
Skills Plan; and 

Implementation of the municipal Bursary Policy. 
Projects and programmes by Eskom under 
Chapter 8 of the IDP.; and 
Water and Sanitation Projects by the municipality 
under Chapter 6 of the IDP. 


20 


A 




Various agricultural projects implemented by 
Enterprise ILembe, including: 

Small holdings farmer support; 

National Schools Nutrition Programme; and 
Hydroponic Tunnel projects. 

The municipality, through water and sanitation 
infrastructure projects is facilitating the 
establishment of sustainable human settlements. 
The Implementation plan contained in Chapter 6 of 
the IDP. 

The Municipality has concluded the following 
Environmental plans: 

The Environmental Management Framework; 
Wetland Assessment Report; and 
Coastal Management Programmes (Mandeni and 
KwaDukuza). 

11. Create a better South Africa and contribute to a All Government Departments, 
better and safer Africa and World 

12. An efficient, effective and development Governance projects included in Chapter 3 and 6 

orientated public service and an empowered, fair of the IDP. 

and inclusive citizenship. 

13. Inclusive and responsive social system Special projects that are included in Chapter 3 of 

the IDP. 

14. Transforming and unifying the country iLembe is implementing a number of programmes 

that foster social cohesion and nation-building, 
these include: 

SALGA Games; 

Golden Games; and 

Cultural Celebrations (uMkhosi weLembe, Eid, 
Diwali, etc.) 

Table 3: iLembe's response to the 14 National Outcomes 

(c) BACK-TO-BASICS APPROACH 

“SERVING OUR COMMUNITIES BETTER!!" 

The Back to Basics programme outlines governments’ plan of action to ensure a focused and 
strengthened local government by getting the basics right and together with other spheres of 
government, providing basic services efficiently and effectively and in a caring manner. The 
main goal is to improve the functioning of municipalities to better serve communities by getting 
the basics right. 


7. Vibrant, equitable and sustainable rural 
communities with food security for all 


8. Sustainable human settlements and improved 
quality of household life 

9. A responsive and accountable, effective and 
efficient local government system 

10. Environmental assets and natural resources 
that is well protected and continually enhanced 


21 





Government has enforced a back-to-basics approach for the country’s 278 municipalities. 
The back-to-basics approach want to sure that robots work, making sure that potholes are filled, 
water is delivered, refuse is collected, electricity is supplied, refuse and waste management takes 
place in the right kind of way. Systems to allow national and provincial governments to monitor the 
performance of municipalities and ensure they respond to crises quicker would be put in place. 


These key performance areas for the Back-to-Basics Approach are premised on the five pillars 
as follows: 


Putting 
People First 



Building 
Capable local 
Government 
Institutions 



Figure 2: Pillars Of Back To Basics 


The key performance indicators are assessed under each pillar on a quarterly basis. The 
programme is measured on an assessment that is main questions, scored and supplementary 
questions considered and the support plan that is implementation on progress. A 60/40 
principle will be applied in terms of scoring. The final results will be categorised as functional, 
challenged and requiring intervention. The understanding of the categorisation is as follows: 

(i) Functional 

A good municipality with a score above 70% 

• Political stability, functional structures and health admin interface. 

• Responsive to service needs & infrastructure well maintained. 

• institutional continuity, clear policy, delegation frameworks in place. 

• High collection rate, 7% on maintenance, CAPEX spent and clean audits. 

• Community satisfaction, regular engagements and feedback. 

(ii) Challenges 

A municipality is at risk with a score between 51% to 69%:- 

• Signs of political instability, excessive interference in admin or SCM. 

• Slow responses to service failures, escalating utility losses or theft. 

• Some critical positions not filled, some managers not qualified. 

• Low collection rates, CAPEX not spent, declining audit opinions. 

• Growing community protests, lack of feedback mechanisms. 

(iii) Requiring intervention 

A municipality with a score below 50%:- 


22 









• High degree of instability, fraud and corruption, committees don't meet 

• Collapse in service delivery, outages, asset theft, and poor maintenance. 

• Incompetent managers, many vacancies, no delegations. 

• Chronic underspending, high debtors, no accountability, disclaimers 

• Community dissatisfaction, high number of community protests. 

It is against this background that the Ministry of Cooperative Governance and 
Traditional Affairs has pursued the Back to Basics Approach to address challenges 
faced by local government, strengthening municipalities, instilling a sense of urgency 
towards improving citizens’ lives. 

The table below illustrates the latest Back to Basics status for ILembe family of 
municipalities. 


MUNICIPALITY DCOG IMPROVED/REGRESSED/UNCHANGED 



Sept 2014 

KZN COGTA 

June 2015 

KZN COGTA 
March 2016 

KZN COGTA 

June 2016 

KZN COGTA 
Sept 2016 

ILembe DM 

Functional 

Functional 

Challenged 

Challenged 

Functional 

KwaDukuza LM 

Functional 

Challenged 

Requiring 

Intervention 

Challenged 

Functional 

Mandeni 

Challenged 

Challenged 

Requiring 

Intervention 

Functional 

Challenged 

Maphumulo 

Functional 

Challenged 

Requiring 

Intervention 

Challenged 

Requiring 

Intervention 

Ndwedwe 

Challenged 

Challenged 

Challenged 

Requiring 

Intervention 

Requiring 

Intervention 


TABLE 4: B2B STATUS FOR ILEMBE FAMILY OF MUNICIPALITIES 


(d) RESPONDING TO IMPACTS OF CLIMATE CHANGE 

As part of the implementation of the 2014 District Climate Change resolutions the 
District is implementing the following project: 

DURATION 


PROJECT NAME 


PURPOSE 


Technological need 
assessment 

Local Action for Biodiversity 
(LAB): Wetlands South Africa management 


Identify a list of technologies for the January to December 
water (adaptation) and energy 2017 

(mitigation) sector 

Identifcation of wetlands and 2015 to 2017 


23 


-V"» 










2016 to 2020 


South africa’s low emission Identify energy efficeincy 

programme opportunities within treatment 

plants and office buildings 
Energy Efficiency Implementing the energy efficiency 2017/2018 financial year 

programme programme within municipal 

facilities including buildings 

Recycling programme to promote recycling within the on-going 

municipal offices 

TABLE: PROGRAMMES RESPONDING TO CLIMATE CHANGE 

(e) DISTRICT GROWTH AND DEVELOPMENT PLAN (DGDP) 

iLembe DGDP provides a framework of ensuring the already adopted IDP vision is 
realized. This will be achieved through a series of goals, strategic objectives, and 
interventions. All of these will be ultimately linked to a set of apex and primary 
indicators to measure the level of DGDP implementation. 

In 2013, Council adopted the iLembe Regional Spatial Development Plan (IRSDP), 
which essentially provided a blueprint for the District to become a “sustainable region” 
by 2050. It was therefore necessary that in developing the DGDP, the proposals 
contained in the IRSDP were considered. To this end, there is alignment between the 
five pillars contained in the IRSDP and the six goals of the DGDP as follows: 

KZN PGDP GOAL ILEMBE DISTRICT GOAL 

Inclusive Economic Growth A diverse and growing economy 

Human resource development Promote social well-being 

Human and community development 

Strategic infrastructure Provide equitable access 

Spatial equity A liveable region 

Environmental sustainability Living in harmony with nature 

Governance and policy Effective Governance, Policy and Social 

Partnerships 

TABLE 5: DGDP OBJECTIVES 

As evident from the table above, essentially the aim of the DGDP is to ensure 
synchronization between the District goals and objectives and Provincial goals and 
objectives. The District goals are an informant to the strategic interventions/projects 
proposed in the DGDP. These interventions are key to the municipality’s ability to 
achieve its vision. 


24 


n a 






In the process of compiling the DGDP, the iLembe family hosted the District Growth 
and Development Summit This was a multi-sectorial engagement to devise 
strategies and projects that would encourage economic growth in iLembe. The 
resolutions of the summit have been incorporated into the strategic objectives of the 
DGDP. 

Due to the long term nature of this plan (2030 vision aligned to PGDS) it was essential 
that the interventions were expressed with short, medium, and long term horizons i.e. 
short term 2016-2020, Medium term 2021-2025, and Long term 2026-2030. A 
comprehensive copy of the DGDP is contained in the municipality website. 



MAP 1: OVERVIEW OF THE ILEMBE REGION 

(e) DEMOGRAPHIC CHARACTERISTICS 

The Statistics SA Census data for 2001 and 2011 and the results of the 2016 
Community Survey have been used for the demographic and the economic 
information in this section. 

(i) POPULATION AND HOUSEHOLD PROFILES 

The recent Community Survey (2016) results show that the population in iLembe 
District has grown to 657,612 people and has been growing at 1.7% per annum from 


25 























2011 to 2016, this is shown in the graph and tables below. In contrast to the previous 
comparison of 2001 and 2011 results, where both rural municipalities of the district 
(Maphumulo and Ndwedwe) were seen to have a decrease in population, Ndwedwe is 
now experiencing an increase but Maphumulo remains on a downward trajectory as 
portrayed below. Table 3 further depicts how the rate of population growth has 
increased per annum in three of the four local municipalities of iLembe, the overall 
growth rate having increased from 0.8% per annum to 1.7% per annum. 



700 000 


600 000 

LU 

_r 

Ol 

O 

500 000 

Q_ 

400 000 

O 


0£ 

UJ 

CO 

300 000 

Z) 

~ZL 

200 000 


100 000 


Population Growth 




u 

2001 

2011 

2016 

iLembe 

560 389 

606 809 

657 612 

■ Maphumulo 

120 643 

96 724 

89 969 

^■^Mandeni 

127 327 

138 078 

147 808 

«^»KwaDukuza 

167 805 

231 187 

276 719 

™*Ndwedwe 

144 614 

140820 

143117 


GRAPH 1: POPULATION GROWTH 2001 TO 2016 

STATISTICS SA CENSUS2001,2011 & COMMUNITY SURVEY 2016 


Municipality 

: Population Growth (% p,a. 
2001-2011) 

Population growth (% p.a. 
2011-2016) 

iLembe District 

0.80 

1.7% 

Maphumulo 

-2.21 

-7% 

Mandeni 

0.81 

1.4% 

KwaDukuza 

3.20 

3.9% 

Ndwedwe 

-0.27 

0.3% 


TABLE 6: POPULATION GROWTH COMPARISON 

STATISTICS SA CENSUS, 2011 & COMMUNITY SURVEY 2016 


26 




























According to the Community Survey 2016, the number of households within iLembe 
District has risen to 191,369 from 157,692 in 2011 and is now growing at 4.3% per 
annum. Households in KwaDukuza have grown at a fairly rapid rate of 6.0% per 
annum; despite a further decline in the population, the number of households in 
Maphumulo has risen slightly. One could speculate that the decline in population but 
with an apparent increase in number of households may be due to further decrease in 
the average size of households. As per the Community Survey 2016, the average 
household size in the District has decreased from 3.8 to 3.4 and the percentage of 
female headed households has risen from 45.8% to 47.1 % which is above the national 
average of 41%. 


Municipality 

Number 

(2016} 

Household 
Growth (% 
p,a,)(2t>16) 

Average 

Size 

(2016) 

Female 

Headed 

%(2016) 

QHOtcf Headed 
(2011.) 


' . : I- ' ) 



Number 

% 

iLembe 

191,369 

4.3% 

3.4 

47.1 

614 

0.4% 

Maphumulo 

20,524 

0.6% 

4.4 

61.6 

115 

0.6% 

Mandeni 

45,678 

3.9% 

3.2 

51.1 

167 

0.4% 

KwaDukuza 

91,284 

1 6.0% 

3.0 

__ 

39.1 

113 

0.2% 

Ndwedwe 

33,883 

3.2% 

4.2 

54.6 

218 

0.7% 


STATISTICS TABLE 7: HOUSEHOLD 

STATISTICS SA CENSUS, 2011 & COMMUNITY SURVEY, 2016 


STATISTICS SA CENSUS, 2011 & COMMUNITY SURVEY, 2016 
It is noted that the above population and household statistics fluctuations are 
implications of the socio-economic conditions prevalent in the different localities of 
iLembe. Further analyses the status quo of the economies of the different local 
municipalities, levels of poverty, employment/unemployment and also gives a view on 
what has been done to stimulate growth, especially in the field of LED. 

(ii) AGE PROFILES 

The graph below provides an indication of the age distribution within the district as 
recorded in 2011, compared with the results of the 2016 Community Survey. 
Within iLembe, 35,5% of the population is under the age of 15, KwaDukuza has the 
lowest percentage 29% and Maphumulo has the highest percentage of the 
population under 15 years at 40%. Throughout the district, it seems that all age 
groups under 65 years have decreased in percentage whilst the percentage of the 


27 





age group of 65+ has risen. Compared to the other Local Municipalities of the district, 
KwaDukuza has the highest percentage of the working age group at 66, 7% whilst 
Maphumulo has the lowest at 52,9%. The majority of people within the District are 
of working age, however the available employment opportunities are not adequate 
to absorb this high number- this will be further elaborated upon in the 
employment profile. 


AGE PROFILE 


100 

90 

80 

70 

60 

50 


S 40 

Cl 

30 

20 

10 






0 ■ 

iLembe 

KwaDukuza 

Mandeni 

Maphumulo 

Ndwedwe 

■2oir<iEr 

35,5 

29 

33,5 

40,6 

37.1 

* 2016 - <15 

33,8 

28 

32 

39 

36 

■ 2011 -15 to 64 

59,8 

66,7 

62,6 

~~52^9 " 

56 r 9 

• 2016-15 to 64 

58 

65 

61 

51 

55 

■ 2011 - 65 < 

5,2 

4,3 

3,9 

6,5 

6 

• 2016 -65 < 

8,8 

7 

7 

11 

10 


GRAPH 2: AGE PROFILE 

STATISTICS SA CENSUS, 2011 AND COMMUNITY SURVEY 2016 


(iii) GENDER PROFILES 

The gender profile of the iLembe District population is typical of the trend prevalent throughout 
other district municipalities in KZN meaning that there is a greater number of females 
(341,926) residing in the area compared to males (315,686). Although the population has 
increased, according to the Community Survey of 2016, the gender ratio remains the same as 
previously highlighted in the 2011 Census. 


28 





FIGURE 3: DISTRICT GENDER PROFILE 

STATISTICS SA CENSUS, 2011 AND COMMUNITY SURVEY, 2016 


(iv) SEX RATIO (MALES PER 100 FEMALES) 

The graph below displays the gender distribution within local municipalities. In iLembe, 
for every 100 females there are 92 males. KwaDukuza is the most even at almost an 
equal split between gender groups, whereas Maphumulo is the most uneven with only 
81 males for every 100 females. 



GRAPH 3: ILEMBE GENDER PROFILE 
STATISTICS SA CENSUS, 2001,2011 & 2016 


2 § 


*>rv 





(v) RACIAL PROFILE 

The graph below displays the split of the population of the district by population group 
from 2001 to 2016. Within the District, the percentage of Black people has shown a 
slight decrease as the graph depicts that in 2001 the percentage was 91% and at 
present it is 89, 2% whilst the percentage of White people is steadily increasing from 
1, 9 % in 2001 to 3.4% in 2016. Between 2001 and 2011 the Asian population declined 
slightly, however between 2011 and 2016, the percentage has shown an increase from 
6 to 6.9%. The Coloured population remains constant at 0.5% of the population of 
iLembe District. 


RACIAL PROFILE 



2001 2011 2016 

Years 


Black ■ Col iiured Mian/A$tan Whte 

GRAPH 4: RACIAL PROFILE 

STATISTICS SA CENSUS, 2001 & 2011 AND COMMUNITY SURVEY 2016 

GRAPH 4: RACIAL PROFILE 

STATISTICS SA CENSUS, 2001 & 2011 AND COMMUNITY SURVEY 2016 

In considering the graph above, it is apparent that iLembe is dominated by different races of 
people who subscribe to different customs and beliefs. ILembe as an institution supports 
cultural events that take place within the District as part of promoting nation building and 
social cohesion, programmes. 


30 







1.4. DISTRICT FUNTIONS AND POWERS 


The following are the Powers and Function that section 156 of the Constitution (1996) of the 
Republic of South Africa accords to the ILembe District Municipality: 


DISTRICT POWERS & FUNCTIONS 

(CHAPTER 7, SECTION 156 OF CONSTITUTION) 

1. IDP 

2. Bulk Water 

3. Bulk Sewerage Purification 

4. Health Services 

5. Tourism 

6. Public Works relating to the above 

7. Grants-receiving & distributing 

8. Impose, Collect taxes &levies 

9. Disaster Management 

10. Accountability 

11. Community participation 

12. Financially & Environmentally sustainable service delivery 

13. Equitable Access to Municipal Services 

14. Local Development 

15. Gender Equity 

16. Safe and Healthy Environment 

17. Performance Management Systems 

18. Incremental Improvement 

19. Responsible Financial Management 


The 2018/2019 Annual Report is therefore aimed at presenting to Council, the community 
and other agencies the performance of the municipality in the above- mentioned powers and 
functions. 


31 


•>** 















































CHAPTER 2: GOVERNANCE 


2.1. POLITICAL AND ADMINISTRATIVE GOVERNANCE 

iLembe District Municipality's council operates under the collective executive system. In 
terms of section 42 of the Local Government: Municipal Structures Act, 1998 the Council 
has established an Executive Committee consisting of six (6) Councillors. The Council 
has also established the following Portfolio Committees to assist the Executive 
Committee:- 

* Economic Development, Planning Health And Safety Portfolio Committee 

* Infrastructure and Technical Portfolio Committee 

* Finance Portfolio Committee: and 

* Local Public Administration and Labour Relations Portfolio Committee. 

Each of these committees is established in terms of the Section 80 of the Municipal 
Structures Act to assist the Executive Committee (EXCO). These committees deliberate 
on matters that fall within the specific terms of references of that particular committee 
and make recommendations to the Executive committee for approval or where 
necessary for endorsement by the executive committee for final approval by the full 
council. 

There are delegations in place for the operations of the EXCO with the exception of the 
power’s provided to council in terms of Section 160(2) of the constitution of the republic 
of South Africa, 1996. The District EXCO can only make recommendation for approval of 
such matters. 

To assist in performing the oversight role, iLembe District Municipality has also appointed 
the following committees: 

i. Audit Committee in accordance with the Municipal Finance Management Act 56, of 
2003 section 166, and operates within the terms of the Audit Committee Charter, which 
outlines its modus operandi. The Audit Committee charter is approved by the Council 
of ILembe District Municipality. 

ii. A Municipal Public Accounts Committee. The Committee consists of six (6) Councillors 
of the Municipality, who are not members of the Executive Committee. The 
Chairperson of the Committee is appointed by the Council. The functions of the 
Committee include the examination of the annual report of the Council and the 

32 


■n 







development of the annual oversight report based on the annual report. The annual 
oversight report is published separately from the annual report. 

2.1.1 POLITICAL GOVERNANCE 



His Worship The Mayor 


Hon Deputy Mayor 

Hon. Speaker 

Cllr SS Gumede 


Cllr. MD Shandu 

Cllr. L. Makhathini 

Name 

Gender 

Designation 

Party Affiliation 

Cllr. SS Gumede 

Male 

Chairperson 

ANC 

Cllr. Shandu 

Female 

Deputy Mayor 

ANC 

Cllr. Sandeep 

Male 

Member 

ANC 

Cllr. Maphumulo 

Male 

Member 

ANC 

Cllr Gopaul 

Male 

Member 

DA 

Cllr. Baardman 

Male 

Member 

IFP 

Cllr LR Makhathini 

Male 

Ex officio 

ANC 


2.1.1.1 COUNCILLORS 

iLembe District Municipality comprised of a total of thirty two (32) Councillors of which nineteen 
(19) were Ward nominated Councillors and the other thirteen (13) are Proportionally 
Representative (PR) Councillors. Council continues to operate on an Executive Committee 
System. In respect of the PR Councillors, there were eight (8) males and five (5) female 
Councillors. The gender composition on the Ward Councillors is seven (7) females and twelve 
(12) males. Overall there are thirteen (13) female Councillors and nineteen (19) male 
Councillors. 


33 


-i-* 








Political Parties are represented as follows in the iLembe District Municipality Council: - 


PARTY 

PR SEATS 

NOMINATED COUNCILLORS 

TOTAL 

African National Congress 

9 

13 

22 

Inkatha Freedom Party 

2 

4 

6 

Democratic Alliance 

1 

2 

3 

National Freedom Party 

0 

0 

0 

Economic Freedom Party 

1 

0 

1 

TOTAL 

32 


2.1.1.2 ILEMBE DISTRICT MUNICIPALITY COUNCILLORS 
(a) PROPOTIONAL REPRESENTATION LISTS 


(i) AFRICAN NATIONAL CONGRESS 


NO. 

SURNAME 

NAMES 

GENDER 

1 

Gumede 

Siduduzo Siegsried 

M 

2 

Shandu 

Monitha Dolly 

F 

3 

Makhathini 

Lucky Regionald 

M 

4 

Mhlongo 

Maureen Zola 

F 

5 

Ntuli 

Sibongile Florence 

F 

6 

Khumalo 

Catherine Tholakele 

F 

7 

Mpofu 

Makhosini Desmond 

M 

8 

Maphumulo 

Musawenkosi Aubrey 

M 

9 

Oudhram 

Sandeep 

M 

1___J 


(ii) INKATHA FREEDOM PARTY 


NO. 

SURNAME 

NAMES 

GENDER 

1 . 

Nene 

Ntombenhle Cythia 

F 

2 

Ntuli 

| Musawenkosi Simeon 

M 


(iii) DEMOCRATIC ALLIANCE 


NO. SURNAME 

NAMES 

GENDER 

1 Gopaul 

Andrew 

M 


14 



















































































(iv) ECONOMIC FREEDOM PARTY 


NO. 

SURNAME 

NAMES GENDER 


Vilakazi 

Innocent Ndumiso 

M 


2.1.1.2 NOMINATED COUNCILLORS: KWADUKUZA MUNICIPALITY 


(a) AFRICAN NATIONAL CONGRESS 


NO. 

SURNAME 

NAMES 

GENDER [ 

1 

Ngidi 

Muzi Emmanuel 

M 

2 

Dube 

Innocent Phumelele 

1 

F 

: 3 - 

Singh 

Radwaath 

M 

— 

, 4 - 

Ngidi 

Thandeka Sinenhlanhla 

F 

i. 5 - 

Van Whye 

James Gabangani 

M 


(b) INKATHA FREEDOM PARTY 


NO. 

SURNAME 

NAMES 

GENDER 

1 

Baardman 

Aubrey Mtolo 

M 

_,_: 


(c) DEMOCRATIC ALLIANCE 


NO. 

SURNAME 

NAMES 

GENDER 

1. 

Singh 

Madhum S 

M 

2. 

Hubner (Passed away on the 31 March 

Malcolm William 

1 

M 


2019) 




2.1.1.3 NOMINATED COUNCILLORS: NDWEDWE MUNICIPALITY 


(a) AFRICAN NATIONAL CONGRESS 


NO, 

SURNAME 

NAMES 

GENDER 

1 . 

Goba 

Philemon Sboniso 

M 

2. 

Shezi 

Mamazane Veronica 

F 

3. 

Zondi 

1 

Silindile 

F 


(b) INKATHA FREEDOM PARTY 


NO. 

SURNAME 

| NAMES 

I GENDER 

1. 

| Jali 

1 TS 

: M 


35 






















































































2 . 1 . 1.5 NOMINATED COUNCILLORS: MAPHUMULO MUNICIPALITY 


(a) AFRICAN NATIONAL CONGRESS 


NO. 

SURNAME 

NAMES 

GENDER 

1 . 

Ngcobo 

Happiness Nonhlanhla 



2. 

Ncalane 

Caroline Zama 

tf 



(b) INKATHA FREEDOM PARTY 


NO. 

1 SURNAME i NAMES 

GENDER 

1 i 

Nyathikazi 

Siboniso Zaba 

M 


2.1.1.6 NOMINATED COUNCILLORS: MANDENI MUNICIPALITY 
(a) AFRICAN NATIONAL CONGRESS 


NO. 

|SURNAME 

NAMES 

GENDER 

1. 

Gwala 

Andile Mazwi 

M 

2. 

Mhlongo 

Malindi Virginia 

F 

3. 

Zungu 

Gloria Nompumelelo 

F 


(b) INKATHA FREEDOM PARTY 


NO 

SURNAME 

NAMES 

GENDER 

1 . 

Sithole 

David Mthokozisi 

M 


2.1.1.7 OVERSIGHT COMMITTEES AND NUMBER OF MEMBERS 


COMMITEEE 

NUMBER OF 

COUNCILLORS 

NUMBER OF | 
VACANCIES 

Executive committee 

07 

Nil 

Finance Portfolio Committee 

07 

Nil 

Economic Development and Planning Portfolio Committee 

07 

Nil 

Local Public Administration and Labour Relations Committee 

07 

Nil 

Infrastructure & Technical Portfolio Committee 

07 

Nil 

Youth Sub Committee 

05 

j Nil 

Gender Sub Committee 

06 

Nil 

MPAC 

06 

. Nil 

Local Labour Forum 

05 

; Nil 

Rules Committee 

06 

i Nil 


36 















































































2.1.1.8 EXECUTIVE COMMITTEE 


No* 

Surname and name 

Gender 

Designation 

Party Affiliation 

i. 

Cllr. SS Gumede 

Male 

Chairman 

| ANC 

2. 

Cllr. Shandu 

Female 

Deputy Mayor 

ANC 

3. 

Cllr. Oudhram 

Male 

Member 

ANC 

4. 

Cllr. Maphumulo 

Male 

Member 

. 

...... 

' ANC 

5. 

Cllr Gopaul 

Male 

Member 

DA 

6. 

Cllr. Baardman 

Male 

Member 

IFP 

7. 

Cllr LR Makhathini 

Male 

Ex officio 

ANC 


2.1.1.9 COMMITTEE ALLOCATIONS 


NO. 

Committee 

Councillors 

1 

Finance Portfolio Committee 


Cllr S. Oudhram 

Chairperson 


Cllr PS Goba 



Cllr HN Ngcobo 



Cllr TC Kumalo 



Cllr ML Ngidi 



| Cllr MW Hubner (Passed away on the 31 
March 2019) 



INKOSI MW Qwabe 


— 

2. 

Economic Development, Planning Health And Safety Portfolio Committee 


Cllr MD Shandu 

Chairperson 


Cllr ME Ngidi 



Cllr MV Shezi 



Cllr GN Zungu 



Cllr MS Singh 



Cllr MS Ntuli 

■ 


INKOSI Gumede 


3. 

Local Public Administration and Labour Relations Committee 


Cllr MA Maphumulo 

Chairperson 


Cllr R Singh 



Cllr ZM Mhlongo 



Cllr SF Ntuli 



Cllr TS Jali 



Cllr MS Singh 



INKOSI S Khumalo 



37 



















































































































4. 

Infrastructure & Technical Portfolio Committee 


Cllr SS Gumede 

Chairperson 


Cllr MV Mhlongo 



Cllr S Zondi 



Cllr JG Van Whye 



Cllr D Sithole 



Cllr MS Singh 



INKOSI NA Bhengu 

1 


2.1.1.10 SUB COMMITEES 












































































































Cllr MS Singh 

__ 

5. 

2.1.1.10.5 RULES COMMITTEE 

t 

Cllr HN Ngcobo 

Chairperson 

ClIrTS Ngidi 


Cllr PS Goba 


Cllr IP Dube 


Cllr MS Ntuli 


Cllr MW Hubner (Passed away on the 

31 March 2019) 



2.1.1.11 THE PURPOSE AND FUNCTIONS OF COMMITTEES 

The following information reflects the different committees of Council and their respective 
purpose and functions: 

(a) Delegations to the Executive Committee 

• Performs the functions of an Executive Committee set out in the Local Government : 
Municipal Structures Act, 1998; 

• Takes such action as may be necessary to ensure compliance by the Council with all 
legislation relating to or affecting local government, including, but not limited to:- 

• The Local Government: Municipal Demarcation Act, 1998 

• The Local Government: Municipal Systems Act, 2000 

• The Promotion of Access to Information Act, 2000 

• The Municipal Finance Management Act, 2003 

• Exercises all Powers of the Council which may be delegated by the Council in terms of 
the Constitution or any other law and which has not been delegated or assigned to any 
Municipal Functionary or municipal employee or is not deemed to be so delegated or 
assigned in terms of any law; 

• Considers and determines any particular matter or issue or any matter of policy referred 
to the Committee by the Municipal Manager; 

• Takes any necessary or incidental decisions for the management or administration of any 
resolution of the Council. 

(b) Delegations to the Rules Committee 

• Developing Rules of Order and amendments thereto for recommendation to EXCO. 

• Summoning any Councillor or official to appear before the committee to assist it in the 
performance of its functions 


39 


in 




• Conducting disciplinary enquiries into Councillor transgressions referred to the 
Committee by the Speaker or MM, and making recommendations in respect thereof 

• Investigating and making findings on any alleged breach of the Code of Conduct for 
Councillors, and making suitable recommendations including suitable sanctions in 
terms of Item 14.2 of such Code 

• Making written representations to the MEC for Local Government pertaining to an 
appeal to the MEC by a councillor who has been warned, reprimanded or fined in terms 
of item 14 (2) (a), (b) or (c) of the Code of Conduct for Councillors 

(c) Delegations to the Finance Portfolio Committee 

• Ensuring compliance with the provisions of MFMA 

• Investigating processes and procedures for the implementation of services relating to 
matters referred to in number 5 

• Making recommendations, in line with the I DP, regarding strategic, administrative, 
technical, financial and procedural issues relating to matters referred to in number 5 

• Ensuring stakeholder participation in matters referred to in number 5 

• Formulating Policy for recommendation to Council and monitoring implementation in 
regard to the following matters:- 

s Audit; 

s Budget Monitoring; 
s Credit Control Monitoring; 
s Expenditure Monitoring; 

S Imposition and collection of taxes, levies and duties related to the functions 
of the Municipality; 
s Income Monitoring; 

S Indigent Support Programme Monitoring; 

s Receipt, allocation and, if applicable, the distribution of grants made to the 
District Municipality; 

s Supply Chain Management Policy oversight; 
s Financial Regulations; 
s Borrowing; 
s Fixed assets; and 
s Cash and Investment 

✓ Reviewing of CFO’s Monthly Financial Reports 

(d) Delegation to the Infrastructure and Technical Portfolio Committee 

• Investigating processes and procedures for the implementation of services relating to 
matters referred to in L 4. 


40 


A A 



Making recommendations, in line with the I DP, regarding strategic, administrative, 
technical, financial and procedural issues relating to matters referred to in number 4 
Ensuring stakeholder participation in matters referred to in number 4 
Formulating Policy for recommendation to Council and monitoring implementation in 
regard to the following matters:- 

o Domestic waste-water and sewage disposal systems; 
o Municipal Fleet Management; 
o Potable water supply systems; 

o Solid Waste Disposal Sites serving more than one local municipality in the 
District; 

Although the issue of the Solid Waste Disposal Site is a statutory function of the District 
Municipality, the function has not yet been performed by the Municipality. 

Delegation to the Economic Development, Planning, Health And Safety Portfolio 
Committee 

Investigating processes and procedures for the implementation of services relating to 
matters referred to in M 4. 

Promotion of local tourism for the area of the District; and 
Promotion of social and economic development, including: 
o Agriculture; 
o Industrial Development 
o Job creation; 
o Social Empowerment; 
o Town Planning; 
o Cultural Upliftment; and 
o Poverty Alleviation. 

Making recommendations, in line with the I DP, regarding strategic, administrative, 
technical, financial and procedural issues relating to matters referred to in number 4 
Ensuring stakeholder participation in matters referred to in number 4 
Formulating Policy for recommendation to Council and monitoring implementation in 
regard to the following matters:- 

s Abattoirs serving a major proportion of the municipalities in the District; 
s Fresh produce markets serving a major proportion of the municipalities in the 
District; 

v' Integrated Development Planning for the District; 
s Municipal airports serving the area of the District as a whole; 
v' Promotion of a safe and healthy environment, including:- 



o Conservation; 
o Environmental Planning; 

(f) Delegation to the Local Public Administration and Labour Relations Portfolio 
Committee 

• Investigating processes and procedures for the implementation of services 
relating to matters referred to in number 4 

• Making recommendations, in line with the IDP, regarding strategic, 
administrative, technical, financial and procedural issues relating to matters 
referred to in number 4 

• Ensuring stakeholder participation in matters referred to in number 4 

• Formulating Policy for recommendation to Council and monitoring 
implementation in regard to the following matters:- 

• Human Resource Development; 

• Labour Relations; and 

• Local Public Administration. 

2.1.2 ADMINISTRATIVE GOVERNANCE 

INTRODUCTION TO ADMINISTRATIVE GOVERNANCE 

According to the MFMA 60(b): The Municipal Manager of iLembe District Municipality 
is the accounting officer of the municipality for the purposes of this Act and provides 
guidance on compliance with this Act to political structures; political office bearers, 
and officials of the municipality and any entity under the sole or shared control of the 
municipality, namely Enterprise iLembe. 

The iLembe District Municipality has a well-established organizational structures and 
systems in place. The structure that was in place as at 30 June 2017 was appropriate 
for the developmental local government mandate assigned to the District Municipality 
in terms of the Municipal Structures Act, 1998. The Municipality's organisational 
structure provides for four Directorates that are managed by the Municipal Manager. 
The District Municipality has four Directorates with senior management per directorate, 
which are: 


Name and Surname 

Position 

Mr N. G. Khumalo 

Municipal Manager 

Mr M Chandulal 

Chief Finance Officer Department of Finance 

Mr T. Makhoba 

Senior Manager: Department of Corporate Services 

MrS. Ngubane 

Acting Senior Manager: Department of Community Services 

Mr. B. Shezi 

Senior Manager: Department of Technical Services 


42 


***» 





2.2 INTERGOVERNMENTAL RELATIONS STRUCTURES 


There are various Provincial Intergovernmental fora in which the District Mayor sits and 
represents the District family of Municipalities. There is a Premier’s Coordinating 
Forum which constitutes of MECs, the Mayors, Heads of Departments as well as the 
Municipal Managers that is chaired by the Provincial Premier. This Forum meets on a 
quarterly basis and has a sub-structure chaired by the MEC COGTA called the 
MUNIMEC which is constituted by the all the K2N Mayors Municipal Managers, Heads 
of Departments as well as the SALGA representative. This sub-structure meets 
quarterly prior the meeting of the Premiers Coordinating Forum. 

There is also a Provincial SALGA structure for all IGR Practitioners and Managers, this 
structure focuses on strengthening relations as well as the coordination IGR functions 
within Municipalities. ILembe District Municipality has been engaging with the 
EThekwini Metro regarding the establishment of the Liberation Heritage Route for 
EThekwini Metro and ILembe district Family of Municipalities. These Municipalities 
have had one successful meeting with clear resolutions that are at implementation 
planning stage as well as draft Terms of Reference. 

At the District level, the District Intergovernmental Forum plays a monitoring and 
oversight role over the family of municipalities. The forum constituted by the Mayors of 
the District family, the Municipal Managers and chairpersons of technical sub-fora; 
meets quarterly to discuss issues of mutual interests, explore possible areas of joint 
ventures as well as monitor progress on compliance issues such as Auditor General 
related queries, compliance with all finance related legislations and financial 
management including revenue generation, quality of services delivered to the 
communities, Municipal Capacitation and so forth. 

All Municipalities are represented to ensure that all resolutions taken are implemented 
respectively. Furthermore the District plays a coordinating role at the request of the 
Local Municipalities to source assistance and interventions to mitigate challenges 
experienced by Local Municipalities. 

Municipal functioning, challenges and best practices are discussed at technical sub¬ 
fora and escalated to the Technical Support Forum which is made up of Municipal 
Managers and the Chairpersons of technical sub-fora. Once the Technical Support 
Forum has discussed the reports from the sub-fora a consolidated report with 
recommendations and/or resolutions is then escalated to the District Intergovernmental 
Forum for further consideration. 


43 


Ant 


DISTRICT INTERGOVERNMENTAL STRUCTURES 

There are fifteen (15) IGR structures in the District as illustrated in the table below. These 
structures are made up of relevant stakeholders from all three spheres of government, 
government agencies, private entities and Amakhosi. 


NO. NAME OF THE FORUM 

MEETING CHAIRPERSON FUNCTIONAL 

FREQUENCY 

1 

DIF: DISTRICT 

INTERGOVERNMENTAL 

FORUM (MAYORS’) 

Quarterly ' District Mayor 

' 

_ 

' Functional 

2 

TSF: TECHNICAL SUPPORT 1 Monthly 

FORUM (MMS 1 ) 

Municipal Manager of ILembe ! 

District Municipality 

Functional 

3 

_ 

4 

DAFF: DISTRICT AREA 1 Quarterly 

FINANCIAL FORUM (CFOs) 

' 

Municipal Manager of 

Ndwedwe local Municipality 

Functional 

DISTRICT GOVERNMENT IT 

OFFICERS COMMITTEE 

(DGITOC) 

Quarterly 

Municipal Manager of ILembe 

District Municipality 

Functional 

5 

DISASTER MANAGEMENT 

ADVISORY FORUM (DMAF) 

Quarterly 

Municipal Manager of 

KwaDukuza Local 

Municipality 

Functional 

6 

PERFORMANCE 

MANAGEMENT SYSTEM 

FORUM (PMSF) 

Quarterly 

Municipal Manager of iLembe 

District Municipality 

Functional 

7 

LOCAL ECONOMIC 

DEVELOPMENT FORUM 

(LEDF) 

Bi-Monthly 

Municipal Manager of 

Mandeni Local Municipality 

Functional 

8 

DISTRICT 

COMMUNICATORS FORUM 

(DCF) 

Monthly 

Municipal Manager of 

Ndwedwe Local Municipality 

Functional 

9 

PLANNING AND 

DEVELOPMENT FORUM 

(PDF) 

Monthly 

Municipal Manager of 

Mandeni Local Municipality 

Functional 

10 

INFRASTRUCTURE FORUM 

(IF) 

Bi-Monthly 

Municipal Manager of 

KwaDukuza Local 

Municipality 

Functional 

11 

CORPORATE SERVICES 

FORUM 

- 1 

Quarterly 

Municipal Manager of 

Maphumulo Local 

Municipality 

Functional 

12 

SPEAKERS’ FORUM 

Quarterly 

District Speaker 

Functional 


A A 


44 









































13 

INTERNAL AUUDITORS 

FORUM 

Quarterly 

Municipal Manager of 

Maphumulo Local 

Municipality 

Moderately 

Functional 

14 

! 

ENTERPRISE RISK 

MANAGEMENT FORUM 

Quarterly 

Municipal Manager of iLembe 

District Municipality 

Functional 

1 15 

DISTRICT AIDS COUNCIL 

Quarterly 

District Mayor 

Functional 


2.3 CORPORATE GOVERNANCE 

2.3.1 ENTERPRISE RISK MANAGEMENT (ERM) 

(A) Introduction 

Enterprise Risk Management (ERM) forms a critical part of iLembe District Municipality 
strategic management. It is the process whereby the iLembe District Municipality both 
methodically and intuitively addresses the risks attached to the strategic objectives and 
activities of the Municipality. The goal is to ensure the achievement of strategic objectives as 
well as the sustained benefit within each activity and across the portfolio of activities. ERM is 
therefore recognised as an integral part of sound organisational management and is being 
promoted internationally and in South Africa as good practice applicable to the public and 
private sectors. 

(B) Objectives of Enterprise Risk Management 

The purpose of Enterprise Risk Management at iLembe District Municipality is to, among 
others provide the following: 

> Advance the development and implementation of modern management practices and 
to support innovation through the iLembe District Municipality. 

> Contribute in building a risk smart workforce and environment that allows for innovation 
and responsible risk taking while ensuring legitimate precautions are taken to protect 
the public interest, maintain public trust, and ensure due diligence. 

> Provide a comprehensive approach to better integrate risk management into strategic 
decision making. 

> To provide guidance to Accounting Officer, Executives Authorities, Management and 
staff when overseeing or implementing the development of processes, systems and 
techniques for managing risk, which are appropriate to the content of the district. 


45 


sr 




















(C) Risk Governance 

(i) Risk Management Committee 

The District Municipality has a Risk Management Committee (RMC) which is made up 
of senior management and the independent Chairperson. The RMC operates within a 
risk charter approved by the Executive Committee. 

The Risk Management Committee is responsible for independent oversight and 
appropriate advice on the risk management process, mitigation of key risk exposure 
and the emerging risks that may have an impact on the District Municipality. The 
Committee's role is to guide the development and implementation of Risk Management 
programme as well as to review and monitor Enterprise Risk management (ERM) 
process and outputs regularly. 

(ii) Reporting and Communication 

> Five (5) RMC meetings were held in the year 2018/19; 

> The Risk Management Committee Chairperson reports to EXCO bi-annually on the 
progress in the implementation of Risk Management in the municipality; 

> Four (4) quarterly reports were submitted to Audit Committee. Top strategic risks 
including strategic fraud risks were reported quarterly to EXCO. Meanwhile the top 
strategic, operational, ICT and fraud risks were reported to appropriate Portfolio 
Committees; 

> EXCO approved the Risk Management Implementation Plan for 2018/19. This plan 
was implemented and monitored on a quarterly basis; and 

> 95% of the activities on Risk Management Implementation plan were achieved. 

(D) Key Performance Highlights for 2018/19 

> Council approval of the following documents: 

• Risk Management Strategy, Policy and Framework, 

• Anti-Fraud and Corruption Strategy & Policy; and 

• Loss Prevention and Management Policy. 

> Risk Management awareness workshops with Councillors, Management, Risk 
Champions, Accountants and Officers 

> Declarations of interest signed by Councillors, Senior Managers and Middle Managers 
and all SCM Officials; 

> Compiled a risk register with 88 risks (Strategic 20 and Operational 35, ICT 6, Fraud 
Risks 21 and MOSCOA 6) through Annual Risk Assessment workshops with 
management; 


AC 


46 



> MSCOA risk register was reviewed; 

> Appointment of the new independent Risk Management Committee Chairperson; 

> Compliance monitoring and reporting in terms of the Laws and Regulation applicable 
to local government; 

> Insurance Claims monitoring and reporting; 

> Loss control reports; 

> Functional District Enterprise Risk Management Forum. 

> Business Continuity desk check test was done. 

> 95% of the activities on Risk Management Implementation plan were achieved. 

> Overall achievement of implementation of action plans for 2018/19 was 71 %. 

> Monitoring operational plans to enhance revenue within the district; 

> Monitoring of plans to mitigate the risk of inadequate water sources; 

> Reported progress on implementation of action plans to Risk Management Committee, 
Portfolio Committees, EXCO and Audit Committee; 

(E) Risk Maturity 

In terms of the National Treasury risk maturity level that consists of 6 levels, iLembe District 
Municipality has achieved level 4 - INFORMATION which means; 

Risk management is firmly embedded in the institution. Metrics to measure the value-added 
of risk management are in place. Aggregated risk management information is circulated to 
relevant officials and oversight structures as a matter of routine. Metrics are in place to 
measure and monitor the value of add of risk management. Risks provide intelligence with 
regard to decision making. 

(F) The Top 5 Risks Facing the Municipality in 2018/19 

(i) Strategic Risks: 

• Business Support: Lack of communication with Stakeholders and communities; 

• Strategy: Inappropriate Corporate Culture; 

• Health and Safety Management: Inadequate Occupational Health & Safety (OHS) 
systems; 

• Technical Services: Scarce raw water sources; and 

• Service Delivery: Violent Public Protest. 

(ii) Operational Risks: 

• Security: Inadequate security over Municipal infrastructure, assets and staff; 

• Financial Management: Misuse of Municipal Fleet due inadequate monitoring 
and supervision by user departments (Supervisors); 


47 


A~f 



• Logistic Management: Inadequate controls over safeguarding of stock; 

• Expenditure Management: Non Compliance with the 30days timeline for 
payment of suppliers; and 

• Financial Management: Incorrect revenue recognition and completeness. 

(iii) Fraud Risks: 

• Theft of goods from stores; 

• Theft of Municipal assets by both the municipal officials and external persons; 

• Conflict of Interest: Unjustified emergency request; 

• Employees claiming overtime that has not been worked or inflating overtime 
hours worked; and 

• Loitering of municipal employees during working hours. 

(iv) ICT Risks: 

(i) IT: Failure to manage an effective and efficient co-ordination of IT continuity in 
the event of disruption. 

(ii) IT: Inadequate protection of information Technology equipment. 

(G) Key Areas of focus for 2018/19: 

Below is the highlight of some of the key focus areas for 2019/20. 

> Monitoring operational plans to enhance revenue within the district; 

> Monitor implementation of the Corporate Culture programme; 

> Report progress on implementation of action plans to Risk Management Committee, 
Portfolio Committees, EXCO and Audit Committee; 

> Development of Combined assurance framework. 

(H) Challenges and Mitigations to improve. 

(i) Inadequate Risk awareness 

While awareness campaigns takes place in the form of workshops risk management 
is still perceived as bureaucratic exercise hence unable to yield visible results at 

operations. 

Mitigation: 

Embedding risk management in the existing business processes to make risk 
management self-sustaining overtime. 

(ii) Instilling Accountability and Encouraging Action: 

Mitigation: 

Mapping the risk to Portfolio Committees and encouraging portfolio hearings against 
the treatment plans. 


48 


AO 



Allocating resources to the highest priority risks. 

(iii) Complex risk management approach to treatment, monitoring and 
reporting. 

Mitigation: 

External risks: Contingency planning and Business Continuity Plan. 

Strategic: focus on key risk indicators and trends. 

Operational: focus on internal controls and establishing procedures and alignment to 
internal audit through combined assurance. 

(I) Outstanding Matters 

> Launch of the Ethics Committee for Councillors. 

> Rollout for the Corporate Culture. 

> Appointment of the Hotline service provider. 

2.3.2 ANTI- FRAUD & CORRUPTION 

iLembe District Municipality has in place an Anti-Fraud and Corruption Strategy and Policy 
that was reviewed and approved by Council. 

The risk of fraud and corruption is one of the Municipality's top strategic risk areas. 

As part of Fraud and corruption prevention the following was done; 

• Declarations of interest signed by Councillors, Senior Managers, Managers and SCM 
employees. 

• Fraud awareness campaigns for all staff members including Councillors was done. 

• Conducting Fraud Risk assessments. 

• Review of the Fraud risk register was done and monitoring on a monthly basis. 

• Fraud and Corruption awareness workshops being conducted for Councillors, Senior 
Managers and middle Managers. 

• Reviewed the Policy for the acceptance^iving of gifts, donations and sponsorship, 
and approved by Council, 

• Designing and development of fraud risk management plan. 

Risk Management Committee functions as an oversight body: this includes the review of the 
effectiveness of prevention initiatives, detection techniques as well as progress made in any 
forensic investigation. 

The Municipality acts swiftly to investigate allegations of fraud & corruption whenever these 
allegations are reported to Management, Executive, Council & Audit Committee. 


49 


AC\ 



2.3.3 SUPPLY CHAIN MANAGEMENT 


The Municipality has a Supply Chain Management Unit that is fully functional and established 
within the Finance Department. All SCM processes are conducted in line with Section 217 of 
the Constitution of the Republic of South Africa, Chapter 11 of the MFMA (No. 56 of 2003), 
PPPFA (No. 5 of 2000) and the 2017 Preferential Procurement Regulations and the SCM 
Policy of the Municipality. 

In order to ensure the segregation of duties, the SCM unit has four elements which operate 
independently but in a coherent manner as part of the supply chain, namely, demand, 
acquisition, logistics and disposal management. Furthermore, there is a contract management 
section which in conjunction with the relevant Project Managers, is responsible for the 
monitoring of all service providers and contractors’ performance. This seeks to ensure the 
successful implementation of projects which will eventually yield to the realization of goals and 
targets as outlined in the Municipality’s SDBIP. 

(a) RANGE OF PROCUREMENT PROCESSES 

All procurement activities are conducted in a manner that is fair, transparent, efficient, 
competitive and cost effective in line with the provisions of the Municipal Finance Management 
Act, (Act 56 of 2003), Supply Chain Management Policy and the 2017 Preferential 
Procurement Regulations pertaining to the Preferential Procurement Policy Framework Act 
(No. 5 of 2000). 

As a prerequisite, all entities doing business with the Municipality must be registered on the 
National Treasury’s Central Suppliers Database (CSD). Over and above other mandatory 
requirements for eligibility to do business with the Municipality, the entities must submit SARS 
pin or tax clearance certificates to enable the verification of their tax status with SARS. This 
verification is done in all procurement process and bidders are given seven working days to 
sort out their tax matters with SARS. 

(b) COMPETITIVE BIDDING PROCESSES 

Section 19(1) of the SCM Policy stipulates that; goods or services above a transaction value 
of R200 000 (VAT included) and long term contracts may only be procured through a 
competitive bidding process, subject to paragraph 11(2) of the SCM Policy. The Municipality 
has established all three bid committees duly appointed by the Accounting Officer, namely, 
Bid Specifications, Evaluation and Adjudication Committees. All projects that are processed 
by these committees must be fully funded and be registered on the annual procurement plan. 

50 


cn 



The Municipality is currently exploring ways of dealing with unsuccessful bidders who lodge 
frivolous and vexatious objections in an attempt to stifle progress in the implementation of 
projects. This in turn cause unnecessary delays especially when these appellant eventually 
lose their appeals. 

(c) IMPLEMENTATION OF THE 2017 PREFERENTIAL PROCUREMENT 
REGULATIONS 

The 2017 Preferential Procurement Regulations pertaining to the Preferential Procurement 
Policy Framework Act Regulations (PPPFA), Act No.5 of 2000 were incorporated in the SCM 
Policy. The Regulations are used to advance designated groups through the procurement 
activities, by applying the following pre-qualification criteria 

• Bidders with a specific minimum B-BBEE status level of contribution (only level 1 
and 2 B-BBEE status level). 

• EME or QSE (*EME = Entity with an annual turnover of up to R 10 Million and *QSE 
= Entity with an annual turnover above R10 Million but not exceeding R 50 Million). 

• Bidders subcontracting a portion of the project (30%) to the local emerging entities 
as per the predetermined list. 

The following statistics reflects procurement patterns in the 2018/2019 financial year 
according to the various groups;- 

(i) A total of R28.807,794.69 (66.32%) was spent on entities operating within the 
district, 

(ii) A total of R37,915,993.15 (87.34%) was spent on black owned entities, 

(iii) A total of R 25,716,185.27 (59.23%) was spent on local black owned entities, 

(iv) A total of R 5,977,421.68 (13.76%) was spent on local entities owned by black 
youth, 

(v) A total of R 6,027,589.13 (13.88%) was spent on local entities owned by black 
women, 

All quotation requests are advertised with a condition that gives first preference in terms of 
Section 2(1 )(f) of the PPPFA (Act No.5 of 2000) to locally based entities from different groups 
from the District that were previously disadvantaged. 

All bid invitations were amended to enable only the emerging entities to bid for municipal 
projects and alt tenders including a subcontracting condition to ensure the empowerment of 
the up and coming entities from the district. 


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LOGISTICS MANAGEMENT 

The Municipality has four site offices that keep stock items, namely, KwaDukuza, Mandini, 
Maphumulo and Ndwedwe. The main stores/warehouse is located in KwaDukuza and 
operates on Munsoft financial system, the satellite stores are operating on a manual system. 
The inventory is maintained through the weighted average method and the following reflects 
the inventory balances and results of the stock count conducted at the end of the month as 
required by the Inventory Management Policy. 

(d) Municipal By Laws 

As a Water Services Authority, iLembe District developed the Water and Sanitation By-Law in 
November 2019.The current By-Law is still under review and is yet to be presented to Council 
for adoption. 

(e) Municipal Website 

In relation to the communications and imparting the municipal information to the public, the 
Communication Sub-directorate in the iLembe District Municipality manages the flow of 
communication from/ to the organization, media and broader communities. It is also 
responsible for attending to the information needs with respect to the Web site of the 
Municipality, checking and approving the insertion of news items, articles and photographs. 
Legislated information in terms of Section 75 of the MFMA is also placed in the municipal 
website and updated as stipulated in the MFMA. This includes the following information:- 

• that have been disposed of in terms of section 14(2) or (4) during the previous quarter; 

• performance agreements required in terms of section 57(1 )(b) of the Municipal Systems 
Act; 

• all supply chain management contracts above a prescribed value; 

• public-private partnership agreements referred to in section 120 of the MFMA; 

• The annual and adjustments budgets and all budget-related documents and all budget- 
related policies; 

• all service delivery agreements; 

• all long-term borrowing contracts; 

• an information statement containing a list of assets over a prescribed value 

• contracts to which subsection (1) of section 33 apply, subject to subsection (3) of that 
section; 

• the annual report; 


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• All quarterly reports tabled in the council in terms of section 52 (df, and other documents 
that must be placed on the website in terms of this Act or any other applicable legislation, 
or as may be prescribed. 

(f) Public Satisfaction On Municipal Services 

One of the communication objectives for iLembe District Municipality is to improve 
communication between the Municipality and its communities. This objective contributes 
towards the national outcome of creating a responsive, accountable, effective and efficient 
local government system. A healthy relationship between the municipality and external 
customers (citizens) is essential as customer satisfaction is a yardstick for municipal 
performance. Customer satisfaction is the output of customer service. Poor service leads 
to unhappy customers whilst good customer service leads to happy customers. However, 
because of financial constraints, iLembe District Municipality did not embark on a format 
citizen satisfaction survey during 2018/2019 financial year. The satisfaction levels of the 
community are assessed through community meetings and media engagement activities. 

2.4 PUBLIC ACCOUNTABILITY AND PARTICIPATION 

Public participation is an integral part of local democracy and participatory local 
governance and that the involvement of communities and community organisations in 
the matters of local government is one of the objects of local government. 

2.4.1 COMMUNICATION, PUBLIC PARTICIPATION AND RELATED FORUMS 

The following are the public participation and communication structures and 
mechanism that exists within the ILembe District Municipality: 

(A) SPEAKERS’ FORUM 

The Forum consists of: 

• the Speaker of iLembe District Municipality; 

• the Speakers of all Local Municipalities 

The chairperson of the Forum is the iLembe District Municipality Speaker. In his 
absence the meeting elects a pro-term Chairperson of the same position. Official 
responsible for public participation also attend the Speakers Forum. 


S3 


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(i) Objectives Of The Forum 

The main objective of the Forum is to promote and facilitate intergovernmental 
relations, cooperative government and share cultures of initiatives between the iLembe 
District Municipality and the Local Municipalities, including:- 

• To seek unity of purpose and co-ordination of effort around the programmes 
championed in the office of the Speaker in the broader District; 

• To serve as a main structure of the District Wide Ward Committee Forum; and 

• To ensure effective and efficient coordinated Community / Public Participation 
within the District. 

The Forum meets quarterly and additional or special meetings are called when and as 
the need may arise by the Chairperson or as per request by any member of the Forum 
through the Chairperson. The Speaker’s forum is functioning and various sector 
departments and stakeholders are invited at these meeting to provide detailed 
information on programme that will impact public participation in the district. 

(B) DISTRICT COMMUNICATORS' FORUM (DCF) 

Government communication is a strategic and planned process that is aimed at 
ensuring effective dialogue between government and the communities. The 
constitution of the Republic of South Africa, 1996, contains a number of sections which 
set the tone for local government communications. These include, Sections 152(1) e; 
Section 160(7); Section 126(3); Municipal Systems Act, 2000; Promotion of Access to 
Information, 2000 and the Intergovernmental Relations Framework Act, 2005. 

Communications has a role of creating messages that harmonise the political and the 
administrative arms of government. Communication is a strategic function that ensures 
the public receives information about municipal policies, programmes and services. 

The District Communicator’s Forum provides a platform for communicators within the 
district municipality to plan and identify communication opportunities across the sphere 
of government through substantive discussions and joint planning to fulfil the 
government’s commitment to accelerate service delivery to ensure a better life for all. 

(i) Composition And Membership 

The membership of DCF is open to all government communicators operating within 
the district. This includes: 

• District Communications Manager - Chairperson of the Forum 


54 



• Communicators from the local municipalities 

• Communicators or representatives of the sector departments with the ILembe 
District Municipalities 

• COGTA 

• GCIS 

• Office of the KZN Premier 

(ii) STRATEGIC OBJECTIVES OF THE DCF 

The objectives of the DCF are as follows: 

• To foster a more positive communication environment among a family of 
municipalities, sector departments and relevant stakeholders within the district 
municipality: 

• To foster integrated communication; 

• To ensure a coherent and effective interaction between the District Municipality 
and its targeted audience; 

• To ensure that citizens of the district participate in the decision making 
processes; 

• To ensure and promote the development of coordinated, integrated and 
sustainable programme of communications in the district; 

• To ensure maximum administrative and operational effectiveness and efficiency 
of all communication programmes in the district; and 

• To support the political leadership across the family of municipalities in its pursuit 
to deliver basic services and development. 

In relation to the communications and imparting the municipal information to the public, 
the Communication Sub-directorate in the iLembe District Municipality manages the 
flow of communication from/ to the organization, media and broader communities. It is 
also responsible for attending to the information needs with respect to the Web site of 
the Municipality, checking and approving the insertion of news items, articles and 
photographs. Legislated information in terms of Section 75 of the MFMA is also placed 
in the municipal website and updated as stipulated in the MFMA. This includes the 
following information:- 

• that have been disposed of in terms of section 14(2) or (4) during the previous 
quarter; 

• performance agreements required in terms of section 57(1 )(b) of the Municipal 
Systems Act; 

• all supply chain management contracts above a prescribed value; 


55 



• public-private partnership agreements referred to in section 120 of the MFMA; 

• The annual and adjustments budgets and all budget-related documents and all 
budget-related policies; 

• all service delivery agreements; 

• all long-term borrowing contracts; 

• an information statement containing a list of assets over a prescribed value 

• contracts to which subsection (1) of section 33 apply, subject to subsection (3) 
of that section; 

• the annual report; 

• All quarterly reports tabled in the council in terms of section 52 (d/, and other 
documents that must be placed on the website in terms of this Act or any other 
applicable legislation, or as may be prescribed. 

(C) OTHER STRUCTURES THAT ARE UTILISED TO ENHANCE / IMPROVE 
COMMUNICATION AND PUBLIC PARTICIPATION 

(i) COMMUNITY DEVELOPMENT WORKERS (CDWs) 

The iLembe District Municipality has total of 77 wards and with only 43 CDWs to 
service these wards. This is a challenge because a large number of wards are not 
benefiting from the services that are provided by the CDWs especially when it comes 
to household profiling and identification of urgent service delivery cases under the 
auspices of Operation Sukuma Sakhe as well as cascading of information to the 
people. Another challenge is that the CDWs are not available to provide support to 
the municipalities because of other commitments that they have from COGTA. 

(ii) TRADITIONAL LEADERSHIP 

The iLembe District Municipality has a total of 33 Amakhosi with 3 vacancies. The new 
District Traditional House was reinstituted in August 2017, and is currently led by Inkosi 
NA Bhengu who is also the member of the provincial house of traditional leadership in 
KwaZulu Natal. There is a healthy working relationship between the Local Traditional 
House and the iLembe District Municipality. Amakhosi are invited in community 
activities that are happening in their areas and district activities that will have impact in 
service delivery in their areas. These activities include IDP Public Participation 
meetings, conferences and seminars, to mention a few. Presentations on matters of 
Council are also periodically made at the seating of the iLembe District Traditional 
Council and tribal Councils on request. In November 2017, a meeting between 
amakhosi and councillors was held with an aim to strengthen relations and this proved 
to be very fruitful because communication has been enhanced. 


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The implementation of Section 81 of the Municipal Structures Act is fully implemented 
and Amakhosi serving in the various Councils are fully integrated in terms of portfolio 
committee allocation. However, there are challenges in term of attendance by 
amakhosi to these meetings. Ongoing engagements are held in order to address 
issues that affect their attendance. 

(iii) WARD COMMITTEES 

All the wards within the iLembe District Municipalities have elected wards committees. 
They have all been inducted and have been provided with training to capacitate them 
to be able to facilitate service delivery issues in their areas. The ward committees in 
the district are largely functional with the support they receive from local municipalities 
and the district municipality. However, there are challenges that are being experienced 
by the local municipalities as they engage with the ward committee: 

• Some Ward Committee Members drop out because they receive better jobs 
elsewhere which leave a vacuum in the committees. The process of replacing 
them sometimes delay; 

• Some members are demotivated because they feel that the remuneration that 
they receive from the municipalities is too little as compared to the amount of 
work that they are engaged with. The iLembe District Municipality provides travel 
costs if they are invited to districts meetings. 

iLembe District Municipality is not responsible for the Ward Committees but gets to 
access the Ward Committees through the local municipalities. The Ward Committees 
form part of the IDP Representative Forum and they are engaged during the planning 
and facilitation meetings. 

(iv) MUNICIPAL RAPID RESPONSE TEAM (MRRT) 

In the recent past KZN has seen a sharp increase of service delivery protests. The 
communities continue to believe that their needs will be better addressed only when 
they take it to the streets. Addressing the triple challenges of poverty, unemployment 
and inequality can assist in alleviating the spate of service delivery protests. The KZN's 
government approach, in dealing with service delivery protests, is more proactive 
rather than reactive. It includes three pillars detailed as follows: 

• A well informed community is less likely to protest. This includes countering 
deliberate misinformation of communities 


57 



Early alert systems. 
Stakeholder engagement. 


In this regard, all municipalities were requested by the KZN provincial government to 
establish Municipal Rapid Response Teams not exceeding seven members, of which 
the Speaker shall be the convener. 

The responsibilities for the MRRT are as follows: 

• to deal with service delivery dissatisfaction. 

• to collect the Memorandum of complainants. 

• to consult with the complainants to establish the facts in the contents of the 
Memorandum. 

In May 2018 and in line with this request, iLembe District Municipality established 
the MRRT (MRRT), and it is formed by the following members: 

• Speaker (Convener and Chairperson of IDM MMRT) 

• Chairperson: Infrastructure and Technical Portfolio Committee 

• Chairperson: Finance Portfolio Committee 

• Chief Whip 

• Municipal Manager 

• Senior Manager: Technical Services 

• Senior Manager: Community Services 

• Chief Financial Officer 

• Manager: Disaster Risk Management 

• Manager: Communications 

• SAPS representative 

The IDM MRRT meets monthly to address protests within the iLembe District 
Municipality. 

(v) IDP PUBLIC MEETINGS 

iLembe District Municipality as a Water Services Authority will at any given point engage with 
local communities on water and sanitation issues. The purpose of these meetings, for an 
example, is to introduce new projects, engage the community on revenue matter and any other 
matters related to the services that are provided by the iLembe District Municipality. The 
iLembe also gets invited to meetings that are planned by the local municipalities to address 
challenges related to sanitation and water provision. 

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Again in relation to IDP meetings, the IDP Representative Forum meetings are convened 
where public representatives and sector departments are invited, and this platform is crucial 
to ensure stakeholder participation and alignment as the IDP process takes place. In addition, 
broader public engagements were held with the communities of the respective local 
municipalities to engage them on their needs and the approval of the budget. The Public 
Participation and Draft IDP and Budget meetings that were held in October/November 2018 
and April/May 2019 are as follows: 





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(D) IDP PARTICIPATION AND ALIGNMENT 


IDP PARTICIPATION AND ALIGNMENT CRITERIA* 

YES/NO 

Does the municipality have impact, outcome, input, output 

Yes 

indicators? 


Does the IDP have priorities, objectives, KPIs, development 

strategies? 

Yes 

Does the IDP have multi-year targets? 

Yes 

Are the above aligned and can they calculate into a score? 

Yes 

Does the budget align directly to the KPIs in the strategic plan? 

Yes 

Do the IDP KPIs align to the Section 57 Managers 

Yes 

Do the IDP KPIs lead to functional area KPIs as per the SDBiP? 

Yes 

Do the IDP KPIs align with the provincial KPIs on the 12 Outcomes 

Yes 

Were the indicators communicated to the public? 

Yes 

Were the four quarter aligned reports submitted within stipulated time 

Yes 

' frames? 



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CHAPTER 3: SERVICE DELIVERY PERFORMANCE 
(PERFORMANCE REPORT PART 1) 


3,1 . PERFORMANCE MANAGEMENT PROCESSES 

The Municipal Systems Act (MSA) of 2000, Section 38(a) mandates municipalities to establish 
performance management systems, and the Planning and Performance Management 
Regulations of 2001, describes the municipality’s Performance Management System (PMS) 
as consisting of a framework that articulates and represents how the municipality's cycle and 
processes of performance planning, monitoring, measurement, review, reporting and 
improvement will be conducted, organised and managed as well as to determine the roles of 
different stakeholders. 

Performance management is a process that measures the implementation of an organisation’s 
strategy. It provides a mechanism to measure whether targets to meet its strategic objectives 
set by municipalities and its employees are met. The PMS implementation and management 
process is carried out at iLembe in different phases namely: 


Phase 1: Planning 

Phase 2: Monitoring and managing performance information 
Phase 3: Performance measurement and analysis 
Phase 4: Performance review and improvement 
Phase 5: Performance report 

Co-ordination involves the overall responsibility of being the custodian of the district’s 
performance management system and managing the system on behalf of the Municipal 
Manager. This is a strategic function which resides in the Office of the Municipal Manager. 
The co-ordination of the implementation phases of performance management is the function 
of the PMS department who are responsible for the following core activities: 

• Co-ordination of the development and implementation activities of the organisational 
PMS, through interaction with all relevant stakeholders; 

• Ensuring and overseeing the implementation of the Performance Management 
Framework and compliance to all performance legislative requirements in respect of 
the implementation of the PMS; 

• Providing regular support and capacity to the different departments in developing 
departmental scorecards; 

• Continuously providing technical support to the Municipal Manager and the senior 
management team with implementation, assessment, review, monitoring and 
information management; 


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• Providing capacity for analysing organisational performance information submitted by 
Senior Managers on a quarterly, mid-term and annual basis in preparation for 
reporting; 

• Responsible for co-ordination and compiling the annual Section 46 performance 
report; 

• Ensuring that all quarterly, mid-term and annual organizational performance reports 
are submitted to relevant stakeholders timeously, for example, quarterly, mid-term and 
annual performance reports to EXCO, Council, the Auditor-General, MEC of 
Cooperative Governance and Traditional Affairs (COGTA) and the public (through 
website; print media notification and copies are made available for viewing at municipal 
offices). 

The performance monitoring flow chart is as follows: 




The Municipal Systems Act of 2000, section 46 (2), requires the municipality to compile an 
Annual Performance Report that forms part of the Annual Report prepared in terms of the 
Municipal Finance Management Act. This Report therefore focuses on the Organisational 
Objectives, and the achievements thereof made by the iLembe District Municipality in the 
2018/2019 financial year. It also provides feedback on the targets as set out in the approved 


63 






















Organisational Scorecard as well as the Service Delivery and Budget Implementation Plan 
used to monitor performance at an operational level. 

3.1.1 PERFORMANCE AND SUPPORTING INFORMATION 

The monitoring system places responsibility on each department and individual employees to 
collect relevant data and information to support the monitoring process. Evidence of 
performance is gathered and presented to substantiate claims of meeting (or not meeting) 
performance standards. All portfolios are verified against the reported actual, as it confirms 
the status of targets met and not met. 

3.1.2 ORGANISATIONAL PERFORMANCE 

The Organisational scorecard is a layered plan, with the top layer dealing with consolidated 
service delivery targets and linking these targets to departmental Service Delivery and Budget 
Implementation Plans. 

The following table indicates the National Key Performance Areas (NKPA's) which includes 
the number of Key Performance Indicators (KPI's) on the Organisational scorecard and 
departmental Service Delivery and Budget Implementation Plans (SDBPI’s). 


NATIONAL KPA’S 



Basic Service Delivery 




ORGANISATIONAL DEPARTMENTAL SDBIPS 
SCORECARD 

8 91 




Financial Viability & Management 


59 


Municipal Institutional Development & 

Transformation 

Good Governance & Public 

Participation 

Local Economic Development 


4 

1 


51 

100 

31 


64 


CA 







The following diagram depicts the performance per national KPA: 


V» 

■_ 

O 


ffi 

u 

B 

c 


Performance Per National KPA 2018/2019 

XQQ 



Municipal Basic Service 

Institutional Delivery 

Development & 

Transformation 

□ Total KPI’s 


Local Economic 
Development 

Target met 


Municipal Financial 
Viablility & 
Management 


Good Governance 
& Public 
Participation 


m Target Not Met 


COMPARISON OF PERFORMANCE OF THE NATIONAL KPA'S FROM THE PAST THREE 

YEARS 





2016/2017 

2017/2018 

2018/2019 

Municipal Institutional 

72% 

80% 

78% 

Development & Transformation 




Basic Service Delivery 

74% 

75% 

66% 

Local Economic Development 

80% 

94% 

81% 

Municipal Financial Viability & 

72% 

85% 

78% 

Management 




Good Governance & Public 

87% 

87% 

77% 

Participation 





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3.1.3 MUNICIPAL INSTITUTIONAL DEVELOPMENT AND TRANSFORMATION 


National KPA: Institutional Transformation & 
Development 



The Human Resources Unit main function is to establish an efficient and productive 
administration, this is done by ensuring all policies are aligned with the legislation. 
Managing the staff component of the municipality, implementing the employment 
equity plan, improve the capacity of staff to deliver services, ensure the municipality 
has well skilled and qualified employees, ensure the municipality provides a safe and 
working environment, promote a safe and healthy work environment in terms of the 
Occupational Health and Safety Act and other relevant legislation. To ensure the 
wellbeing of employees and to ensure effective and efficient document management 
systems are in place. 


NATIONAL KPA’s 

TOTAL KPI’s 



EXCLUDING N/A 

TARGET MET 

TOTAL TARGET 

MET % 


Municipal Institutional Development 

Transformation 

51 

40 

78% 

Basic Service Delivery 

91 

60 

66% 

Local Economic Development 

31 

25 

81% 

Municipal Financial Viability & 

Management 

59 

46 

78% 

Good Governance & Public 

Participation 

100 

77 

77% 




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The Support Services Unit ensures effective governance through regular Council meetings, 
by supplying resources and support services for all EXCO, Council and portfolio committee 
meetings. 

The Legal Unit provides legal advice and ensure resolution of legal matters against and/or on 
behalf of the municipality, by limiting losses to the municipality - legal risk mitigation, ensure 
the municipality is legally protected in its agreements with service providers. 

The ICT department provide an innovative, effective and efficient information and 
communication technology service. The department does this by updating and reviewing 
policies annually, enable the achievement of the municipal objectives as per the IDP, reduces 
costs of electricity consumption and greenhouse emissions. To align ICT objectives with best 
practices, manages the provision of the telephone communications and to ensure effective 
and efficient functioning of ICT. 

3.2 PERFORMANCE HIGHLIGHTS AS PER THE ORGANISATIONAL SCORECARD 
AND NATIONAL KPA 

The Municipal Manager's performance plan covers targets that are reported by departments 
on a quarterly basis on highlights and challenges, reports were submitted by the human 
resource department and municipal health services. 

All new employees were invited to attend the induction in terms of the induction policy. The 
report on the Employment Equity Plan was prepared and submitted to the Department of 
Labour by deadline. The workplace skills plan is on track with all targets, 50% of employees 
were trained in accordance with WSP. All employees and Councillors on WSP were informed 
of invitations for relevant training and development through COGTA, SALGBC and SETA 
approved programmes. All letters were issued to the approved employees for formal education 
registration. 

Twenty two (22) employees were trained who are not part of WSP and 60% of programmes 
were implemented in line with WSP against a target of 50%. Quarterly reports are prepared 
on the implementation of the District Human Resource Development Strategy and on the 
implementation of the municipal assisted study scheme for employee’s policy. The work place 
skills plan and annual training report was completed and submitted to LGSETA before the 
deadline date. The investigation on the scarce skills plan has been done and captured through 
the policy on municipal staff retention and attraction. 


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Quarterly and monthly reports are prepared on the implementation of the occupational health 
and safety plan. A total of 235 staff were trained on site in terms of occupational health and 
safety and 14 workshops were held on all LMS. Five wellness programmes were held and the 
target was exceeded due to an additional wellness programme which was done through health 
service providers. 

Four workshops were held on effective document management system. In terms of the 
coordination of all Council and EXCO meetings, all scheduled meetings were held and minutes 
were prepared. The target has been exceeded due to additional special meetings that were 
held. In terms of portfolio committee meetings, all meetings were coordinated. 

For the Legal Unit, days for drawing and vetting legal documents is at 2,66 days and the 
turnaround time for legal matters to be resolved is 15 days against a target of 1 month. All 
service level agreements are finalised within one month of request. 

Monthly reports on monitoring of the performance on ICT SLA’s are prepared. The ICT security 
policy was reviewed and presented to Council at a workshop and then submitted for approval. 
Four project plans were developed. Six buildings are installed with Energy Efficiency 
Technology in terms of implementation. 

In accordance with the ICT governance framework, four reports were prepared on the 
implementation of ICT risk management and ICT disaster recovery plan, two business 
continuity plan tests were conducted and quarterly reports were prepared on the ICT 
governance framework. The Ndwedwe offices were connected with the telephone system, it 
was tested and it is fully operational. Quarterly reports were prepared on the assessment and 
maintenance of the ICT infrastructure. 

Ref El 27 & 28 Enterprise iLembe training budget expenditure is at 100%. The Board reviewed 
Organogram and 90% of positions on the organogram are filled. 


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3.3 CHALLENGES AND MEASURES TO IMPROVE PERFORMANCE AS PER THE 

ORGANISATIONAL SCORECARD AND NATIONAL KPA 


CHALLENGES 

MEASURES TO IMPROVE PERFORMANCE/ 

CORRECTIVE MEASURES 


MUNICIPAL INSTITUTIONAL TRANSFORMATION AND DEVELOPMENT 


Ref Org 16 - the vacancy rate is at 14, 29% 
against the target, maintain under 12%. The 
increased vacancy rate figure is somehow 
affected by the implementation of austerity 

measures as some posts are prioritised to be 

filled. Also, it is affected by resignations, 

retirements, dismissals and deaths. 

To conclude eight prioritised posts by the first quarter. 

Ref Org 17 - Number of people from 
employment equity target groups employed 
in the three highest levels of management in 

compliance with the municipality's approved 
employment equity plan is only 2 filled 

against a target of 3. 

3 people were appointed in the three highest levels, 
but only 2 comply with the Equity Plan. The target 
should have been to appoint 2 males and 1 female in 
order to be in line with the Equity Plan & Targets. 

Equity target candidates can only be appointed if they 
comply with and meet the requirements as provided 
for in the Regulations on Appointment and Conditions 
of Employment of Senior Managers. Adverts already 

include a sentence that reads thus: "Women are 

strongly encouraged to apply". 

Ref Org 18 - Percentage of the municipality's 
budget actually spent on implementing the 
approved WSP is at 0, 56% against a target 

of 1%. 

Institutional budgetary constraints inclusive of austerity 
measures currently impose financial constraints on 

allocation of skills development given urgent and top 

priority service delivery imperatives. 'Training provision 
enhanced through external training opportunities 
including but not limited to LGSETA, SALGA, COGTA, 

etc. 

Ref CS 01 - Seven policies were reviewed 

but not submitted to EXCO and Council by 

the deadline date. 

It was not submitted due to scrutiny by the Senior 
Manager. The policies will be submitted to the next 
EXCO and Council in the new financial year. 

Ref CS 02 (b) - No induction workshops 

were held, in the last six months of the 

financial year. 

Induction was scheduled in March 2019 however it 

was postponed, but was not held due to the 
unavailability of the newly appointed employees. 
Inductions will be held in the new financial year. 


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Ref CS 13 (b) - Occupational Health & safety 

training - Target of 160 sites inspected in 

terms of unsafe working conditions was not 

met, as 66 sites were done. There are 

different challenges from each site that impact 

on time spent in each area. Distance travelled 

between sites, also affects time. 

Target will be re-looked at, in the new financial year, j 
based on challenges encountered. Standard OHS Site ■ 

Inspection & Assessment Schedule to be developed to ; 

expedite critical aspects of each and every site 

inspection 

Ref CS 15 - Assessment of municipal 

buildings based on health and safety - the 

draft feasibility study was not done. Failure of 

the Service provider to present according to 

expectation of the municipality led to non¬ 
finalisation of this target. 

Strategic intergovernmental engagements with high 

capacity neighbouring municipalities to provide 

technical support are in progress. 

Ref CS 19 - The minutes prepared as per 

meetings held by deadline - one set could not 

: be done. 

The meeting was not held due to lack of quorum, the 

meeting will be held in August 2019. 

Ref CS 24 (a) - Monitoring of Service Level 

agreements, Mimecast could not be renewed 

before the start of the new financial year, as 

budget is required to prepare an order. The 

system was closed up until 15 July 2019. 

SAGE VIP SLA was due for renewal on 28 

Feb 2019 which was not done on time, as we 

were awaiting for adjustment budget. SLA 

renewal is dependent on budget availability. 

SLA for Mimecast will be renewed in the first quarter of 
2019/2020 financial year. However the SAGE VIP SLA 

was renewed on 2 April 2019. 

Ref CS 26 (b) - Number of functional ICT : 

strategy projects plans by deadline is not 
done against a target of 2 in terms of 

. Biometric Access control the sole service 

provider in dispute and it's escalated to 

COGTA. Launch of the call centre App is 

delayed due to the unavailability of field 

workers to attend training in May 2019, which 

was rescheduled in June 2019, however due 

to strike could not continue. 

Once appropriate advisory inputs are obtained, bid 

spec and subsequent procurement processes will be 

concluded in the 1 st quarter of the new financial year. 

Field workers will be trained in July and the call centre 

launch app will take place in August. 


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3.4 BASIC SERVICE DELIVERY 


National KPA: Basic Service Delivery 



The core function of the municipality is to ensure sustainable provision of water and sanitation 
services and improve access to these basic services thereby reducing backlogs. The provision 
of water must be of excellent quality that will meet or exceed the National Standards. 
Response time to water and sanitation interruptions is crucial for services reinstated therefore 
specific timeframes have been set that must be adhered to and monitored for continuous 
customer service. 

The table below shows the households connected for water and sanitation for the 2018/2019 
financial year: 


TOP LEVEL SUMMARY OF 2010/2019 HOUSEHOLD {HH} BENEFICIARIES 



TOTAL NUMBER 

ACTUAL NUMBER 

PERCENTAGE 


TARGETED 

CONNECTED 

ACHIEVEMENT 




AGAINST TARGET 

WATER 

1 099 

1 604 

146% 

SANITATION 

1 800 

1 361 

76% 


71 


*71 



















3.4.1 EXPENDITURE 

The overall expenditure on water capital projects are as follows: 


PROJECTS 

ORIGINAL 

BUDGET 

■ - !v, -r, ■ • 

1 ‘ " ■ • .. 

ADJUSTMENT 

BUDGET 

ACTUAL 

EXPENDITURE TO 

DATE 

% SPENT 

TO DATE 

AGAINST 

ADJUSTM 

ENT 

BUDGET 

WATER 

Ngcebo /KwaDukuza Water Supply 

R4 608 695 

R19 691 332 

R 20 046 706 

75% 

Lower Thukela Bulk Water Supply - 

Total Adjusted budget was 

R69,833,964, however the Final budget 

is R73,033,964 due to R3.200.000 for 

1ML Rerservoir at Driefontein - 0112- 

Phase 1- TS/169/2016 as the project 

was funded by rollover during the 

adjustment 

R 59 422 609 

R3 033 964 

R 45 389 656 

Ozwathini/Phambela Water Supply 

(Maphumulo) 

R11 667 826 

R 22 273 818 

R 21 936 922 

Macambini Water Supply Phase 2 

R25 217 391 

R42 192 258 ! 

R 28 826 016 

Balcome/KwaSizabantu Water Supply 

(Maphumulo Wards 5 & 6) 

R4 086 957 


R2 490 722 

Ndulinde Water Supply Scheme 

(Mandeni Ward 6 and 11) 

R11 304 348 

R9 036 089 

R 5 607 545 

Wosiyane Extension - Water Supply 

R4 347 826 

R 237 678 

R237 678 

Total - Adjusted budget was 

R163.265.139, however the Final 

adjusted budget is R166,465,139 due 

to R3,200,000 for 1 ML Rerservoir at 

Driefontein -OT12- Phase 1- 

TS/169/2016 as the project was funded 

by rollover during the adjustment 

R 120 655 652 

R 166 465 139 

R124 535 245 


72 


7 *) 




The overall expenditure on sanitation projects are as follows: 






% SPENT 

PROJECTS 

ORIGINAL BUDGET 

ADJUSTMENT 

BUDGET 

ACTUAL 

EXPENDITURE TO 

DATE 

TO DATE 

AGAINST 

ADJUSTM 

ENT 

BUDGET 


SANITATION 


Ndwedwe TS/158/2015- 

There was a transfer of funds, 

and the final budget is R 

1 7,455,651 

R 8 695 652 

R 6 695 651 

R10 033 683 

Mandeni TS/156/2015 - There 

was a transfer of funds, and 

the final budget is R 4,700,000 

R8 695 652 

R 5 000 000 

R4 653 627 

Maphumulo TS/157/2015 - 

There was a transfer of funds, 

and the final budget is R 

6,235,651 

R8 695 652 

R6 695 651 

R 6 175 425 

Groutville Waterborne 

Sanitation 

R28 695 652 

R35 700 100 

R 33 021 768 

Mandafarm Waterborne Sewer 

- at Mandeni 

R4 347 826 

R 

R - 

Darnall WWW Upgrade 

R 2 608 696 

R 215 940 

R 195 358 

Driefontein Water Borne 

Sewer 

R1 739 130 

R 249 548 

R 249 548 

Mdlebeni Water Borne Sewer 

R869 565 

R - 

R 

Sundumbili WWTW Upgrade 

R2 608 696 

R800 000 

R1 027 315 

KwaDukuza Regional WWW 

R2 608 696 

R1 000 000 

R 410 300 

Total 

R69 565 217 

R 56 356 890 

R55 767 024 


73 


T) 









3.4.2 PERFORMANCE HIGHLIGHTS AS PER THE ORGANISATIONAL SCORECARD 


AND NATIONAL KPA 

Ref Org: 1 - to ensure continuous and sustainable water services, the total number of 
households with access to water, is 1 604. 

The overall achievement against annual target is 146% for water obtained for 2018/2019 
financial year. There are 500 households with access to water from Ozwathini/Nondabula 
water supply scheme that were not targeted for in 2018/2019. These connections have an 
impact on the water backlog eradication that decreased by 0, 84%, which is an improvement 
of 0.53% when compared to the previous financial year, 2017/2018, which was 0.31%. 

The backlog eradication calculation is based on the total number of households in the District 
of 191 369 by Statistics SA, Community Survey 2016. This is the official and latest information 
available for use. 

Turnaround time for reinstating water services within 48 hours and for sanitation services 
within 24 hours is at 100%. 

Ref Org: 03 & 06 - To provide excellent water quality that meet or exceed national standards 
and to monitor wastewater quality, four quarterly reports were prepared as of end June 2019 
for blue drop and green drop assessment status. 

In terms of progress on all capital projects details are as follows: 

Ref TS 17 - Zone F, L, M & AO - Stage 6 is complete 

Ref TS 19 - Ngcebo/KwaDukuza water supply - Zone B&D, AH, AK, AF & Luthuli 
(Maphumulo) - The project is on track as per the plan. 

Lower Thukela Bulk Water Supply; the following projects are complete as per set targets; 

• Ref TS 21 - OT 11 - 2,5 Ml Mgigimbe Reservoir & Mbonisweni Pump Station - 
TS/132/2015 

• Ref TS 23 - UW Siyaphambili - OT 6- Phase 2 500 Dia pipe from UW to Lindelani, 
Pumping station 0/T6 at Lindelani, 5ML Reservoir at Lindelani - TS/151/2015 


74 





• Ref TS 25 - Construction of 500mm dia x 2800m long PVC pipeline and 5 Ml Reservoir 
at Siyaphambili - OT 06 - TS/155/2016 

• Ref TS 26 - 1ML Reservoir at Driefontein - OT 12 - Phase 1 - TS/169/2016 

Lower Thukela Bulk Water Supply; t he below projects are at construction stage and they are 
ahead of targets, as the Contractor has been instructed to accelerate work on the ground; 

• Ref TS 29 - OT 1 - Construction of 3MI Reinforced Concrete Ikamu Reservoir, 4.3km 
UPVC 200mm diameter gravity main and 1 pumpstation at San Christopher - 
TS/189/2017 

• Ref TS 31 - OT 7 - Blythedale 400mm dia pipeline & 5ML Reservoir - TS/187/2017 

Lower Thukela Bulk Water Supply; t he following projects are at construction stage and they 
are on track, although there are challenges on the ground; 

• Ref TS 32 - OT 8E - Stanger Manor 315mm dia pipeline - TS/185/2017 

• Ref TS 33 - OT 8F - Shakaville & Stanger - 200mm dia pipeline - TS/186/2017 

• Ref TS 34 - OT 8F - Stanger Manor- 300mm dia pipeline 

Lower Thukela Bulk Water Supply; t hese projects are at Stage 4 - 50%, which is design 
development and they are on track, 

• Ref TS 36 - OT 13A - Ingelmere Estate, Helmsley, Mursia cane - 400mm dia pipeline 
& Reservoir 

• Ref TS 37 - OT 13B - Ingelmere Estate - 300mm dia pipeline 
Ozwathini/Phambela Water Supply (Maphumulo) - Ref TS 39 - the project is complete. 

Macambini Water Supply Phase - Phase 2, t he projects are at construction stage; 

• Ref TS 41 - Sundumbili Rising Main - TS/175/2017, progress to date is 84%, when 
compared to target of 70%. 

• Ref TS 42 - Mandeni Pump station - TS/176/2017 progress to date is 95%, when 
compared to target of 100%. 

• Ref TS 44 & 46 - Macambini Water Supply - Phase 4, 5, 6 & Phase 7, 8, 9 - 
Documentation and Procurement processes are complete for both projects and they 
were completed in March 2019, earlier than the planned date, which is 30 June 2019. 


75 






Balcombe/KwaSizabantu Water Supply 

• Ref TS 48 - Ntunjambili water supply scheme, Stage 3 is at 10%, which is preliminary 
design 

• Ref TS 50 - Zone I & J - TS/161/2016, the project is complete 

Ref TS 54 - Wosiyane Extension Water Supply - Swayimane Msilili, Ndaka, and Hoqweni, 
community water supply scheme, documentation and procurement process is on track as per 
the target. 

In terms of the sanitation projects, Ref Org: 04, the below projects are at construction stage 
and they are ahead of targets, 

Groutville Waterborne Sanitation 

• Ref TS 62 - Construction of bulk sewer in INo. 600m 3 /Day Package Wastewater 
Treatment Plant and Mnyundwini, Njekane and Etsheni Pumping Station -TS/179/2017 

• Ref TS 63 - Construction of bulk sewer in INo. 600m 3 /Day Package Wastewater 
Treatment Plant Chris Hani, Lloyds & Ntshawini Settlements and Gledhow village pump 
station - TS/180/2017 

Ref TS 65 - Mandafarm Waterborne Sewer - at Mandeni, Stage 3 is at 10%, which is 
preliminary design 

Ref TS 67 - Darnal Waste Water Works Upgrade - Stage 5 - documentation and procurement 
stage is complete. 

Ref TS 69 - Driefontein Water Borne Sewer - Preliminary design is at 100%, when compared 
to target of 10% in June 2019. 

Ref TS 75 - KwaDukuza Regional wastewater works upgrade - Stage 1 is complete, which is 
planning, studies, investigations and assessments. In addition, Stage 2 - Inception is 
complete. Both stages were completed in December 2018, earlier than due date, which is 
March and June 2019 respectively. 

Majority of maintenance and replacements of ageing infrastructure projects are on track; 

• Ref TS 77 - Fawsely Park to Highridge - TS/165/2016, the project is complete. 

• Ref TS 79 - Masibambisane - preliminary design stage is complete 

• Ref TS 81 - KwaDukuza Old Mains Replacement - documentation and procurement 
stage is 80% complete. 


76 





• Ref TS 83 - Mandeni Old Mains Replacement - Stage 1 is complete, which is planning, 
studies, investigations and assessments. 

There were good Contract Participation Goal partners who assisted the Contractor in 

speeding up progress on the ground, at Ndwedwe: 

• Ref TS 86 - Ndwedwe North Refurbishment water schemes - TS/184/2017, 
construction stage is at 98%, when compared to target of 80%. 

• Ref TS 87 - Ndwedwe South Reticulation Refurbishment - TS/197/2019 - 
documentation and procurement stage is 98% complete. 

• Ref TS 89 - Lindelani Sewer upgrade at KwaDukuza - Stage 1 is complete, which is 
planning, studies, investigations and assessments. 

3.4.3 CHALLENGES AND MEASURES TO IMPROVE PERFORMANCE AS PER THE 
ORGANISATIONAL SCORECARD AND NATIONAL KPA 


CHALLENGES 

MEASURES TO IMPROVE 

PERFORMANCE 

REF ORG 01 - WATER PROJECTS 

Ref TS 29 - Off take (OT) 5 - 5ML new Hvde 

Geosure was called back to site to check 
the earthworks drawing and make new 
recommendations and the construction 
resumed on the 05th April 2019. 

Park Reservoir; 1.3km of UPVC 200mm 

diameter pipeline - TS/188/2017 - Design 

level material not compactable (Red Sand) 
and the Contractor has to stop until 
IDM/Geosure advise them. In addition, 
heavy rain caused a stoppage on site. 

Ref TS 52 - Ndulinde Water Supply Scheme 
(Mandeni) - Phase 1, 2C & 4C - 
TS/178/2017 - The construction progress is 
at 36%, when compared to target of 70%. 
Delays are mainly due to poor performance 
by the Contractor. 

Contractor has been served with an 
intention to terminate by IDM on 02 July 
2019. They have responded committing to 
complete the work, in February 2020. IDM 
is continuing with the termination process. 

TS 15 - Stage 7 is complete, however only 
the progress report has been received. 

The close out report will only be available in 
February 2020, as the Contractor is still 
attending to snags 

Ref Org 04/05 “The % decrease in backlog 
eradication is 0.71% against a target of 
0.94%. Mandeni VIP toilets 

TS/156/2015 - The Consultant had to 
address faults from the previous phase 
before commencing on current year's 
allocation, as a result only 161 VIP toilets 

Faults have been sorted and construction 
has commenced on new phase 


77 


n 





have been constructed when compared to 
target of 600. 

Ref Org: 07-3 reports are prepared on monitoring of the concession in terms of the Siza 
Water Plan as the 4 th quarter report was not received from the service provider. 


SOUTHERN REGIONAL BULK WATER AND SANITATION SCHEME 


Ref TS 15 - Southern Regional Bulk water We have received general authorisation and 
scheme - TS/181/2017 - Construction stage 1 the Contractor will be moving to site, 
was not met, as tender has been awarded. 


Ref TS 15 - Southern Regional Bulk 
sanitation scheme -TS/182/2017 - Contract 
has been awarded. There were delays due 
to farmers refusing access to land. 


The project will only commence, once we 
receive WULA approval. A meeting was 
held with farmers, some of them have 
agreed to give access to land. Negotiations 
are continuing. 


Ref Org: 8 - As part of the Extended Public Works Programme through water, sanitation 
infrastructure and service delivery efforts 1168 people were employed from all local 
municipalities within the District, against the target of 1 300. Target could not be achieved 
due to challenges encountered at Mandeni VIP project - TS/156/2015. 


REF ORG 04 - SANITATION PROJECTS 


Ref TS 58 - Mandeni VIP project - 
TS/156/2015 - Total household 

beneficiaries targeted for new sanitation 
provision was six hundred (600). The actual 
number of households with access to 
sanitation is one hundred and sixty one 
(161). The target was not met, as the 
Consultant had to address faults from the 
previous phase before commencing on 
current year's allocation. 


Faults are sorted and construction has 
commenced on a new phase. 


Ref TS 71 - Mdlebeni water borne sewer- The target of Stage 4 - 10%, which is design 
development, was not met. The Project is on hold - awaiting KwaDukuza Municipality to 
confirm if the construction of new houses will continue. 


Ref TS 73 - Sundumbili Waste Water Treatment Works Upgrade- The target of Stage 4 - 
10% was not met, which is design development. Water Use Licence Application is not yet 
finalised. 


REFURBISHMENT/REPLACEMENTS PROJECTS 


Ref TS 85 - Water Conservation/Water 
Demand Management Plan - There was a 
delay in finalizing the process of appointing 


The municipality is in the process of 
appointing the new service provider 
(TS/199/2019) for the period of three years. 


78 


“TO 





the service provider to undertake Water 
conservation/Water Demand Management 
due to objections by bidders. 

Ref TS 82 - Maphumulo Old Mains Replacement - Stage 1 is not done, as the Operations & 
Maintenance unit was advised that, there was no need for such a project. 


3.5 LOCAL ECONOMIC DEVELOPMENT 


National KPA: Local Economic Development 



■ Total KPI's Target met ■ Target Not Met 


Enterprise iLembe continues to improve co-ordination of Local Economic Development in the 
District. Implements and ensures sustainability of projects to upscale agriculture development 
in the District. Capitalises on tourism potential to increase visitor numbers in the District. 
Increases manufacturing output in the District to attract interest in investment. And ensures 
job creation by identifying and packaging new projects in existing sectors. 

3.5.1 PERFORMANCE HIGHLIGHTS AS PER THE ORGANISATIONAL SCORECARD 
AND NATIONAL KPA 

Ref Org: 19 - A total of 20 small scale farmers were identified and supported by the Entity. 

The Integrated Development Plan was reviewed and adopted by Council on 29 May 2019. In 
terms of the District climate change response strategy, the project is ahead of target as the 


79 































Consultant, which was appointed by the Department of Environmental Affairs, prepared the 
draft strategy. 

Drafting of the Integrated Waste Management Plan has been done and is currently at 
situational analysis phase. 

Quarterly LED forums are held and attended with representatives from all the local 
municipalities. Regarding new markets for farmers, report was prepared on capacitating 
farmers and engagements with Government departments by the deadline. The project of 
agricultural Hydroponic Tunnels, the Ndwedwe site is fully operational. Quarterly reports were 
prepared on the maintenance of the vineyards. The ownership model for existing projects, 
formalisation of co-operatives for handing over by June 2019 is on track and a report has been 
prepared outlining the progress status. 

Tourism potential is on track, one Community Tourism Organisation was established at 
Mandeni. Tourism marketing and development is progressing well, with six exhibitions 
attended, seven adverts/advertorials were in relevant publications, one official tourism travel 
guide for 2019/2020 financial year was developed, two tourism industry research performance 
reports prepared and six events supported to increase visitors to the district. 

Two business confidence indexes were developed. Bi-annual reporting was done on the 
implementation of the investment promotion strategy. The investor prospectus was reviewed 
by end June 2019. A total of 31 business networking sessions were attended/hosted and 2 
progress reports were prepared on the Entrepreneur competition. 

New co-operatives registered as of at end June 2019 is at 32 and 47 co-ops and SMMEs were 
assisted with funding applications. Two programmes were implemented, namely, the business 
incubator and the skills development facilitation programme. An engagement session was 
held with local municipalities to encourage local businesses to take advantage of government 
programmes. 

Funding was secured form the department of Labour to activate the UIF learner activation 
programme. The broadband project, funding was sourced for Phase 1 of the ICT project, it 
was secured from COGTA for the public Wi-Fi programme in Ndwedwe and Maphumulo. 


so 


on 



3.5.2 CHALLENGES AND MEASURES TO IMPROVE PERFORMANCE AS PER THE 


ORGANISATIONAL SCORECARD AND NATIONAL KPA 


CHALLENGES 

MEASURES TO IMPROVE PERFORMANCE/ 
CORRECTIVE MEASURES 

LOCAL ECONOMIC DEVELOPMENT 

Ref OMM 34 - Only 6 planning and infrastructure alignment meetings were held due to the slowdown 

in development primarily because of the slow economic growth rate. 

........ .... ^ i 

Ref OMM 35 - The reviewed district growth and development plan is not yet adopted. It will be 

undertaken through the Vuthela iLembe LED programme due to unavailability of internal financial 

1 resources. 

Ref El 02 - Percentage produce procured from Local 

iLembe farmers is at 59% against a target of 70%. 

Target was not met due to lack of infrastructure 

development, harsh weather conditions, seasonality 

of some of the commodities, which had to be 

sourced from the market. 

Enterprise iLembe has received funding from 

Cogta, which will be used towards infrastructure 

development; we have also engaged the 

Department of Education regarding the planting 

of substitute commodities to mitigate against 

seasonality. Department of Agriculture has also 

been engaged to assist with the supply of inputs 

and infrastructure development. 

Ref El 03 - Fourteen new farmers have been 

introduced for support by the Entity for the 

2018/2019 financial year when compared to target 

of twenty. Further, six existing farmers were 

maintained as they still require assistance in terms of 

agricultural inputs and mechanization 

KPI will be reviewed during 2019/2020 budget 1 

| 

adjustment to include new and maintained | 
small scale farmers in order to meet the target 1 
and also aligned to the KPI 

Ref El 09 - The feasibility study for new tourism 

initiatives was not done. 

Project timeline changed due to change in scope 

of works. Project completion date will be in next 

financial year 

Ref El 21 - Sixty four [64] co-operatives were trained, 

against the target of 94. Additional Forty-seven [47] 

SMME's were trained during 2018/2019 financial 

year, however they are not measured on the SDBIP. 

Total co-operatives and SMME's trained adds up to 

111. 

KPI will be reviewed during 2019/2020 budget 1 

adjustment to include SMME's. 

i 


81 


04 



3.6 MUNICIPAL FINANCIAL VIABILITY AND MANAGEMENT 



Compliance monitoring is crucial to ensure all legislative deadlines are adhered to. The finance 
department therefore continuously ensures that effective and adequate financial management 
is always a priority. The budget and compliance unit meets all required legislated standards 
to ensure credible budgeting. The focus of the budget and compliance department is on 
monitoring and ensuring compliance with the MFMA and relevant regulations. The expenditure 
management unit maintains sound expenditure management principles. 

The Assets and logistics management department implements sound and effective asset 
principles. Revenue management continues to monitor revenue collection and debtors’ 
management. The Supply chain management unit continues to implement the framework 
policy, inventory principles and adherence to the approved policy. 

3.6.1 PERFORMANCE HIGHLIGHTS AS PER THE ORGANISATIONAL SCORECARD 
AND NATIONAL KPA 

Ref Org: 9 - To ensure sound and credible general financial management principles, 100% of 
all statutory monthly and quarterly reports to National & Provincial Treasury were submitted 
as per the section 71 regulation. 


O') 


82 



















Ref Org: 11 - Total debt coverage is at 11%. The norm is 45% and below, this indicates that 
the municipality has the capacity to increase funding from borrowings; however, this should 
be considered within the cash flow requirements of the municipality. 

Ref Org: 15 - The annual financial statements for the 2018/2019 financial year were submitted 
to the Auditor - General as per the legislative deadline date on 31 August 2019, including the 
consolidated financial statements. The municipality achieved an unqualified audit opinion, 
where matters that were qualified were due to financial constraints. 

The finance department achieved a total of 1 269 against a target of 650 households in terms 
of the reduction of unmetered household’s within the district. 

Revenue protection and enhancement, revenue growth of the municipality is at 49% against 
a target of 5% with the increase in debtors which resulted in high billing. Service charges 
revenue budget implementation is at 94%. 

All overdue accounts are being restricted. In terms of debtor’s management, 100% of debtors 
over 90 days are issued with notices via statements of accounts/SMS. The percentage of 
households on the indigent registered earning less than R3500.00 with access to free basic 
services is at 100%, as per approved applications. Bad debts written off as a percentage of 
the bad debts provision is at 100%. 

The fully funded operating and capital budget for 2019/2020 was approved by Council on 29 
May 2019. The Municipality complied with KZN Provincial Treasury checklist on the 2018/2019 
approved adjustment budget and the 2019/2020 first draft budget. The implementation and 
monitoring of the monthly Standard Operating Procedures reports have been prepared. 
Financial statements are being prepared on a monthly basis and progress on audit queries 
resolved is at 92%, against the target of 80%. The remuneration cost monitoring is at 30% 
which is within the norm of 25% to 40%. 

The turnaround time for the Supply Chain Management processes in recommending preferred 
bidders to departments is 10 days against a target of 10 days for amounts between R30 000 
and R200 000 and 3 days against a target of 5 days for amount between R2 000 and R29 999. 

Contract Management - quarterly consolidated reports are prepared on performance of 
service providers. In terms of inventory management monthly stock takes are done, 


Q3 


83 



turnaround time to resolve queries is at 14 days and monthly reconciliations are conducted 
between the stock report as per Munsoft and the AFS. 

Assets and logistics management conducted the asset verification for quality and a reliable 
fixed asset register on movable and immovable assets is being done quarterly and annually 
respectively. Monthly reconciliations were conducted between the asset register & annual 
financial statements. 

Impairment of property, plant and equipment is at 0.12%. Monthly reconciliations are 
conducted between assets under construction & the project register. Capital expenditure to 
total expenditure is at 24%. The high capital expenditure is attributable to current projects 
under construction and being paid for. 

In terms of financial viability within the Entity, all MFMA Section 87 (11) monthly financial 
information reports are submitted to the District by deadline. Cost coverage is at 3.75:1 and 
cash flow management is at 112 days. The Entity received an unqualified audit opinion with 
finding for 2018/2019 financial year. 

3.6.2 CHALLENGES AND MEASURES TO IMPROVE PERFORMANCE AS PER THE 
ORGANISATIONAL SCORECARD AND NATIONAL KPA 


CHALLENGES 

MEASURES TAKEN TO IMPROVE 

PERFORMANCE 

Ref Org: 10 - Average number of days taken 

for trade creditors to be paid is at 47 days 

when compared to the target of 30 days. The 

cash flow position of the municipality 

continues to be constrained given the 

persisted poor collection rate particularly 

from historic debt. 

Management and Council are working 

vigorously to turn the situation around by 

means of strengthening the credit control and 

collection measures; implementing stringent 

cash flow monitoring; revamping and re¬ 
enforcing control measures at the Stores 

department, amongst other measures to be 

implemented as well. 

Ref Org: 13 - the monitoring of revenue 

collection is at 64% against a target of 75%. 

This is due to conversion of prepaid meters 

to conventional metering, which has 

increased billing. Consumers are taking 

more time to pay. Disconnections are not 

The revenue section to enforce and implement 
the credit control policy. Disconnect 

consumers frequently. Hand over consumers 

to the debt collector for collection. Monitor 

meters that are not buying water and convert 
them to conventional metering and also j 


84 


QA 




done frequently. High level of faulty prepaid 

meters, leads to the conversions. Culture of 

non-payment by consumers. Additional 

areas are being read in Groutvilie which is 

resulting in more billing and unable to collect 

immediately. 

monitor the ones that have been converted 

and track payments as there is a culture that, 

the consumers are on prepaid and therefore 

do not pay. 

Ref Org: 14 - Turnaround time for awarding 
all the tenders (bids) is at 94 calendar days, 

against a target of 90 calendar days. 

Management to implement close monitoring 
on bid committee sittings to be finalized within 
the stipulated periods. 

Ref FV 03 - Overdue accounts restricted is 

at 74%, when compared to target of 100%. 
This is due to human capital shortages. 

Siza Water was contracted to assist the 

municipality with restrictions. 

Ref FV 07 - Indigent with access to free basic 

water is at 1701 against a target of 3000. The 

challenge is that, indigent applications are 
expiring and consumers are not coming 

forward to re-apply for the benefit. This is not 

i 

within the control on the department and 

thus dependant on consumers coming 

forward. 

The Vuthela programme is currently 
underway, to align indigents register of the 

district to the local municipalities. 

Ref FV 15 - Cash/Cost Coverage Ratio is at 
34 days, compared to the target of 60 days. 

This is attributed by the cash flow position of 

the municipality that continues to be 

constrained given the persisted poor 

, collection rate particularly from historic debt. 

Management and Council are working 
vigorously to turn the situation around by 

means of strengthening the credit control and 

collection measures; implementing stringent 
cash flow monitoring; revamping and re¬ 
enforcing control measures at the Stores 

department, amongst other measures to be 

implemented as well. 

Ref FV 16 - Current Ratio is at 1.10:1 against 

a target of 1.5:1. 

Ref FV19 - Percentage progress in 

implementing the procurement plan is 70% 

against the target of 100% due to some 

projects not starting during the financial year 
therefore this affected the annual target. 

To closely monitor user departments for the 

periods as set out in the procurement timetable 

so projects are completed within the stipulated 

timelines. 

Ref CS 32 (a) - Information and ] 

Communication Technology had one repeat ; 

finding in 2017/2018 financial year. 

The IT Compliance Officer post is in process of 

being filled. For the remaining vacant posts, 
management will engage with Budget Steering 


oc 


$5 






Committee and ensure that, the required funds 
are made available to fill vacant ICT posts 

Ref TS 06 - Capital expenditure monitoring 
is at 68% when compared to the target of 
100%. This is due to the following 

challenges; 

1. WSIG grant was received late and 

the technical services department 

could not appoint the service 

provider due to the objections. 

2. Massification grant allocation was 

received late. 

3. RBIG - we could not get access to 

land, which delayed project 

expenditure. 

1. Objections are at Municipal Bid 

Appeals Tribunal (MBAT) and will be 

finalised in quarter 1 of 2019/2020 

financial year. 

2. Massification grant has been spent, 

and there is a rollover to the new 

financial year. 

3. RBIG - the municipality applied for a 

rollover and Contractor to complete 

works by December 2019. 

Ref TS 07 - Repairs and maintenance expenditure target was not met, as actual is 74% 

Ref El 32 - Operational budget expenditure 

is at 80% 

Insufficient evidence received. 

Ref El 34 (c) - Monitoring progress on 

2017/2018 audit action plan is at 95,5% 

Awaiting response from South African 

Revenue Services regarding the reversal of 
interest and penalties. 


86 


OC 




3.7 GOOD GOVERNANCE AND PUBLIC PARTICIPATION 


National KPA: Good Governance & Public 
Participation 



■ Total KPI's Target met ■ Target Not Met 




Effective public awareness of municipal business is important in order to strengthen 
partnerships with various stakeholders through communicating municipal business. This is 
done through information dissemination in the form of radio slots, external and internal 
newsletters and on-going advertorials and public participation. Implementation of the various 
strategy also plays a role. 

The Disaster Management Unit ensures rapid and effective response in assisting vulnerable 
communities during incidents and disasters, that disaster stricken communities exercise the 
risk avoidance behaviour during all incidents and disasters. Capacity building programmes are 
held to create a resilient and pro - active community. 

The special projects units’ main intention is to improve the quality of life within the district, by 
mobilising the communities against social impacts of HIV/Aids and to conscientise society 
about the impact of patriarchal policies. Implementation of Operation Sukuma Sakhe is also 
done within this unit. To preserve our history and heritage many celebrations are held to 
promote arts and culture, tourism and social cohesion within the District. Implementation of 
youth programmes is done to harness the potential of young people to enable them to play a 
meaningful role in society. 

The health and safety unit ensure a sustainable and health environment by providing effective 
vector control, monitoring water quality, ensuring that the statutory requirements controlling 
occupational health and environmental health services are enforced minimising risks in the 

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work place and community. Monitor food handling premises/processes according to 
Regulation 364 of the Foodstuffs, Cosmetic and Disinfectant Act. 


Budget and monitoring of performance against predetermined objectives is being done to 
ensure effective organisational performance. Effective risk management is done to implement 
and maintain compliant effective and enterprise risk management. 

3.7.1 PERFORMANCE HIGHLIGHTS AS PER THE ORGANISATIONAL SCORECARD 
AND NATIONAL KPA 

Ref Org: 20 - Council adopted the Oversight report on 23rd March 2019. 

Ref Org: 22 - Two reports from Audit Committee were submitted to EXCO to ensure 
effectiveness of the committee and internal Audit Unit. 

Ref Org 23 - Water quality monitoring and analysis continues with 245 samples taken and 
analysed to date, target exceeded due resampling and incidental disease outbreak 
investigations-typhoid resulted in extra samples being taken. 

In terms of the Municipal Manager’s Performance Plan - quarterly reports on progress and 
challenges were submitted to the Office of the Municipal Manager on the enhancement of 
public participation and emergency relief aid. Five Municipal Managers district 
intergovernmental forum meetings were held. Target exceeded as one special meeting took 
place on 13 th March 2019. 

Four Internal Audit reports were submitted to the Audit Committee and a total of 17 internal 
audit assignments were conducted. In terms of implementation of the action plan, actual is 
48% against the target of 44%. 

To ensure effective risk management, four risk registers were updated and five ethics 
committee meetings were held, one being a special meeting. Monthly updated risk monitoring 
tools are done and submitted by deadline for all departments. 

The 2018/2019 enterprise risk management registers were submitted to EXCO in June 2018 
and to heads of departments. The reviewed enterprise risk management framework was 
submitted to the risk management committee on 19 June 2019 and two risk management 
workshops were held by end June 2019. The anti-fraud and corruption strategy and policy was 
reviewed and approved by EXCO in June 2019. 


QQ 


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The Organisational Performance Management Framework was reviewed and approved by 
Council on 29 May 2019. The 2017 /2018 Annual Performance Report was completed and 
submitted to the Auditor - General by the stipulated deadline of 31 August 2018. 

The annual external performance appraisal for the 2017/2018 financial year was conducted. 
Most departments have been reporting on time on performance management with portfolio of 
evidence by the stipulated deadlines as well as resolving queries. Quarterly performance 
reviews are conducted between the Mayor and Municipal Manager and the Municipal Manager 
and Senior Managers. 

Forty two mayoral slots was conducted against a target of 40, the target was exceeded due to 
the strengthening relationship with the media that is always willing to support the municipality. 
External and internal newsletters were prepared, 3 external and 6 internal. 

Quarterly reports have been prepared on the status of the press releases, 100% of all adverts 
requested by departments were done and the turnaround time for media queries received and 
responded to were done with the target of 36 hours. Hosting of municipal events and mayoral 
public meetings are on track with 49 events, this also includes Council meetings open to the 
public held in local municipalities and 36 IDP/Budget meetings were held. 

Percentages of incidents/disasters responded to within 48 hours is at 94%, a total of 27 
awareness campaigns were held and two requested were also held, 18 capacity building 
programmes were conducted. The district disaster management advisory forums are held on 
a quarterly basis. The district disaster management plan was reviewed by deadline, all inputs 
have been consolidated from stakeholders and this included the Climate Change impacts and 
the risk maps that have been generated by the iLembe Geographic Information Systems unit. 
Quarterly workshops were held to rollout the Disaster Management Volunteers 
strategy/Framework. 

The World Aids day event was held on I s1 December 2018 and the District concept document 
was developed on 13 November 2018. Four District Aids Council meetings were held and 
quarterly reports were prepared and submitted to the office of the Premier. Thirty-five HIV/Aids 
awareness campaigns were held. The target was exceeded as the Child Protection awareness 
campaigns were conducted during Child Protection month where 20 schools were visited in 
the District. 


QQ 


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Five heritage events were held by deadline. Council approved the iLembe District Municipality 
Annual report on the 31 January 2019. The implementation of the youth plan is on track with 
8 programmes implemented, 14 984 youths benefitting from these programmes and 100% 
requested held, due to partnerships with stakeholders in terms of budget assisted programmes 
have conducted more as well as good participation of stakeholders. Nine sports events were 
participated in and hosted. 

The health and safety unit is on track with targets, in terms of vector control 433 sites were 
serviced within budget and there were no vector borne cases investigated. Target was 
exceeded in terms of site visits due to the increased number of complaints and request for 
sampling private and schools boreholes. All unsatisfactory samples were reported to relevant 
authority. 

Municipal health services is at 100% with all food handling license applications received and 
processed within 14 working days, all building plans scrutinised within 8 working days in terms 
of health regulations and all funeral undertakers applications are processed in terms of 
regulation. Number of premises inspected to reduce food borne illness is at 918, target 
exceeded due incidental food related investigations such as fake food and listeriosis and food 
poisoning outbreak resulted to increased number of inspections and follow ups. All food borne 
illnesses reported were investigated. A total of 83 health awareness campaigns were held, 
target exceeded due to an outbreak of rabies and food poisoning cases necessitated the extra 
campaigns. 

The community services department and the Entity are submitting performance reports with 
portfolio of evidence by deadline on a monthly basis as well as conducting quarterly 
performance reviews. 

To ensure effectiveness of intergovernmental relations, the corporate services department 
attended nine sub - forums. 

The entity multi-year strategic plan with clear measurable targets has been reviewed and 
approved by the board in February 2019. A total of 14 board and sub-committee meetings 
were held to ensure effectiveness of the Board and two reports were prepared by the Audit 
Committee and submitted to the Board and the District by deadline. 


on 


90 



3.7.2 CHALLENGES AND MEASURES TAKEN TO IMPROVE PERFORMANCE AS PER 
THE ORGANISATIONAL SCORECARD AND NATIONAL KPA 


CHALLENGES 

MEASURES TO IMPROVE PERFORMANCE/ 

CORRECTIVE MEASURES 

Ref Org 21-3 Mayors Forum meetings were held 
against a target of 3. The meeting for quarter 4 was 
disturbed by the election period. 

The meeting will take place in the first quarter of 
the new financial year. 

Ref OMM 18 - The Internal Audit plan was developed 
and presented to the Audit Committee for approval in 
November 2018, whereas the target was 30 
September 2018. 

Audit Committee 1st ordinary meeting for 

2018/19 was held on 23 November 2018. 

Ref OMM 20 (a) - the internal audit assessment was 
conducted late due to capacity being a challenge. 

(b) The action plan was reviewed late. 

(a) & (b) The internal audit assessment and 

action plan was submitted to the Audit 

committee in November 2018. 

Ref OMM 28 (a) & (b) - 78% of the business 
continuity plan was achieved against a target of 
100% and the testing of the plan was not conducted. 

(a) Training for members to be done in the first 

quarter of 2019/20. 

b) Testing of the Business Continuity plan, to be 
done in fourth quarter of 2019/20. 

Ref COM 03 - The communication strategy was reviewed but not submitted to EXCO/Council 

Ref COM 04 - The implementation of Language 
policy is at 78% against a target of 100%. 

Various units submitted adverts close to the 

deadline of the local newspapers as a results it 
was practically impossible to translate the 
adverts in time for publishing. 

Ref COM 05 - The media engagement strategy was 

reviewed but not submitted to EXCO/Council 

The strategy is to be reviewed and adopted 
timeously. 

Ref COM 06 - Communication and media liaison 

capacitation workshop not done 

The expected support from COGTA and GCIS 
was not forthcoming due to financial constraints. 
Capacity to train will be sought from the sector 
departments and local municipalities to 

facilitate. 

Ref COM 15 - LAC meetings held was only 4 against 
a target of 11 

The sitting of LACs is controlled by locals and 
it's beyond the District. The challenges will be 
discussed the LTT chairpersons to improve the 

situation. 

Ref COM 17 (a) The gender plan was reviewed but not yet adopted by Council 


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01 




Ref COM 18 - OSS - only 13 interventions hosted in 
LMS against a target of 16 and 1 quarterly report was 
prepared 

No reason for variance and corrective measure 

provided. 

Ref COM 19-11 DTT meetings took place against a 
target of 12 

The last meeting could not be held in June 2019 

due to the protest action. 

Ref COM 25 - The youth strategy was not developed 
and adopted by Council. Due to budget constraints, 
we were unable to develop strategy. 

This will be done in next financial year as it is 
budgeted for. 

Ref EI039 - Audit committee report submitted to the 
Board and the District - One report received. 

Only received evidence for 1 that is report to the 

Board of Directors, dated 5 December 2018. 


3.8 KEY AREAS TO NOTE 

3.8.1 IMPROVING PERFORMANCE 

In order to improve performance, the iLembe District Municipality, throughout the performance 
management phases, will analyse the causal and contributory reasons for poor performance, 
through coaching sessions from top to lower levels of the administration and appropriate 
response strategies will be developed. These will include, inter alia: 

• Restructuring as a possible solution for an inappropriate structure; 

• Process and systems improvement strategies to remedy poor systems and processes; 

• Training and sourcing additional capacity where skills and capacity shortages are 
identified; 

• Change management and diversity management education programmes to address 
organisational culture; 

• Review of the IDP where Councillors will address shortcomings in the strategy; 

• Development of appropriate departmental business plans and operational plans to 
guide performance in each department; and 

• Where results show no chance of improvement through internal measures, alternative 
service delivery mechanisms are considered. 

3.8.2 DETERIORATING PERFORMANCE 

Poor performance in municipalities is often characterised by disclaimers and adverse opinions 
from the Auditor - General and community protests for inadequate service delivery. The worst 
measure that is taken for worst performing municipalities is the Section 139 intervention by 
the MEC for Local Government in the province. 


O'? 


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The effective implementation of the performance framework and the different roles and 
responsibilities that will be played by different stakeholders will serve as an early warning 
mechanism for the iLembe District Municipality to keep ahead of performance and to effect 
corrective measures timeously in any of the weak functional areas identified by the 
performance management system. 

3.9 PERFORMANCE OF SERVICE PROVIDERS 

All service providers performance is monitored and reviewed on a monthly and quarterly basis, 
however as defined in the Systems Act Section 76 the service providers performing the core 
functions of the Municipality are rated below in table. 


Performance Analysis and rating criteria:- 


PERFORMANCE WEIGHTING 

1 

POOR 

Performance did not meet most contractual requirements and 

contains serious problem(s) for which correction actions were 

ineffective. 

2 

! SATISFACTORY 

Performance did not meet some contractual requirements, 
contractors actions appear only marginally effective or were not 

i 

fully implemented. 

3 

1 

i 

! 

GOOD 

Contractual performance of contractor contains some minor 

problems for which corrective action taken by the contractor 
appear or were satisfactory 

4 

VERY GOOD 

Performs meets contractual requirements some minor problems 
for which corrective action taken by the contractor were effective 

5 

EXCELLENT 

Performance meets contractual requirements with few minor 
problems for which corrective actions by contractor were highly 

effective. 


QH 


93 





















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CHAPTER THREE; SERVICE DELIVERY PERFORMANCE 
(PERFORMANCE REPORT PART 2) 

3.10 PROVISION OF BASIC SERVICE SERVICES IN THE 2018/19 FINANCIAL YEAR 
THE OBJECTIVE OF THE TECHNICAL SERVICES DEPARTMENT IS: 

• To provide sustainable infrastructure that will render water and sanitation services to 
cover the entire area of iLembe District Municipality; 

• To eradicate the backlogs and cater for future demands within iLembe District 
Municipality; 

• To ensure the quality of drinking water in the region is improved to meet the standards 
for safe drinking water as per SANS. 

(a) MAJOR CAPITAL PROJECTS UNDERTAKEN 

This section is an account on the major Capital Projects that were undertaken by the District 
in all the Four (4) Local Municipalities that fall within its jurisdiction. The account is presented 
per Local Municipality and schemes with that Municipality. 

(b) DISTRICT WIDE WATER CONSERVATION AND DEMAND MANAGEMENT 

The iLembe District Municipality embarked on a serious drive to deal with the reduction of 
unaccounted for water through the implementation of a water conservation and demand 
management project. This project is aimed at replacing all the old infrastructure that is leaking 
and often breaks thus causing service interruptions. The project will also install pressure 
reducing valves to minimize the pressures in the system in order to reduce leaks. 

This project is implemented throughout the municipal area where challenges of old 
infrastructure as well as high water losses are experienced. The KwaDukuza CBD has been 
completed and the project will now be implemented in Ndwedwe and Maphumulo areas. The 
program will be rolled out throughout the district municipality and is funded through the Water 
Services Infrastructure Grant from the Department of Water and Sanitation. 

3.10.1 WATER 

(c) MANDENI LOCAL MUNICIPALITY 

(i) Ndulinde Sub-Regional Water Supply Scheme 
The Ndulinde Sub-Regional Water Supply Scheme fall within wards 5. 6 and 11 of Mandeni 
Local Municipality. The scheme is intended to provide portable water supply to the community 

95 


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that is currently being served through boreholes that are equipped with hand pumps and some 
springs that are within the area. 


The source of water is from reservoir C that is fed from the Sundumbili Water Works, which is 
situated on the northern banks of the Thukela River. The scheme will serve a total of 42,752 
people residing in some 10,691 households. The scheme is estimated to cost R 270,197,305 
and is implemented in phases until 2019/20 financial year when it will be fully commissioned. 

The current dispensing method is the communal standpipe system, however the scheme has 
been redesigned to be upgraded from communal standpipes to yard connections. This is 
done so as to provide the communities residing in Ndulinde with a higher level of service other 
than the communal standpipes. The implementation of the project has been delayed by a 
non-performance by service providers who threaten to go to court if their contracts are 
terminated. The project has since been brought back on track and is on the Implementation 
Stage. 


(») Macambini Sub-Regional Water Supply Scheme 
The Macambini Sub-Regional Water Supply Scheme fall within wards 1, 2, 3, 8 and 9 of 
Mandeni Local Municipality. The scheme is intended to provide portable water supply at a 
basic level of service to the community that is currently being served through boreholes that 
are equipped with hand pumps and some springs that are within the area. The scheme will 
also augment the current supply from the Mlalazi Water Scheme that is under UThungulu 
District Municipality who act as a bulk water provider to iLembe DM. 

During dry seasons, UThungulu DM is unable to meet iLembe DM's demand and this often 
results in shortage of water to the community of Macambini. The source of water is the 
Sundumbili Waterworks, which is situated on the northern banks of the Thukela River that is 
upgraded from 27M/l/d to 40M/l/d in order to increase the capacity of water works. 

The scheme will serve a total of 58,480 people residing in some 7,310 households. The 
scheme was estimated to cost R 101,726,581.00 and was intended to be implemented in 
phases until 2017/2018 financial year when it would be fully commissioned. 

The Macambini project was scheduled to start in 2007 but was put on hold due to the 
RUWAAD / Dubai Development that was proposed by the Provincial government. This led to 
a delay in the start of the project from 2007 to 2013 and has resulted in the increase in the 
estimated cost of construction due to escalation of prices over the 5 years. The revised 


Q£ 


96 



construction cost is now R 616,572,540.31 and it incorporates a revised scope that involves 
upgrading of bulk water mains and pump station from the Sundumbili Water Works, converting 
from communal standpipes to individual yard connection and supplying bulk water 
connections to other housing developments that are en route the bulk pipeline in the areas of 
Sundumbili Township and Mandeni Town. The revised completion date is now 2020/2021. 

(d) KWADUKUZA LOCAL MUNICIPALITY 

(i) Lower Thukela Regional Bulk Water Scheme 
The Lower Thukela Regional Bulk Water Scheme is intended to serve the area of KwaDukuza 
with portable water supply. The demand for water on the coastal area of KwaDukuza has 
increased and the current supply from the Umdloti and Umvoti river systems are insufficient 
to meet the projected water demand. 

The project is implemented jointly by iLembe District Municipality and Umgeni Water and will 
cater for the: 

- current demand, 

- future private developments of commercial, industrial and residential nature, 

- low cost housing developments, 

- rural areas currently served as stand-alone schemes, and 

- Rural area that is currently un-served. 

The scheme is expected to serve the following: 

- 64,239 bulk connections to commercial and private units, 

- 28,567 low cost housing units, 

- augmentation of bulk to 3,349 rural households, and 

* 

- bulk and reticulation to 3,083 rural households without services. 

The scheme is expected to cost a total of R 1,283,580,681.00 and is implemented in phases, 
subject to availability of funding. The primary bulks have been commissioned by Umgeni 
Water and the iLembe District Municipality has also completed and commissioned five (5) off 
takes that are now getting water to the communities. The implementation of further off take 
lines is ongoing and is likely to be completed during 2020/2021, on condition that the 
Department of Water and Sanitation continues with funding the project. 


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(e) NDWEDWE LOCAL MUNICIPALITY 


(i) Umshwathi (Wartburg) Water Pipeline. 

The iLembe District Municipality has since partnered with Umgeni Water to construct a bulk 
pipeline from the Midmar Dam that will bring water through Umgungundlovu DM and 
Umshwathi Local Municipality areas to ILembe District Municipality. The scheme will cover 
ward 4, 5, & 6 in Ozwathini - Phambela, Mlamula and Nodwengu areas under Ndwedwe Local 
Municipality. 

The pipeline implementation started 2016/17 and consist of three phases with the last phase 
being implemented during 2018/2019 and are currently being commissioned. The bulk 
command reservoir has been built at Nondabula linking to the existing reticulation networks 
that exist in the area. 

(ii) Nsuze Water Scheme 

iLembe District Municipality resolved to construct a weir, as an interim measure, at Nsuze 
River to supply ward 2,4,5, 6, 8 in Ozwathini / Phambela under Ndwedwe Local Municipality, 
whilst awaiting for the Phase 5 of Mshwati Water Scheme to be completed in 2021/2022. The 
upgrades have been done on the scheme to produce 2MI/day from IMI/day. 

(iii) Kwa Chili Shangase Pipeline 

The area of KwaChili/Shangase has a reticulation network but has a challenge with bulk water 
supply. 

The Department of Water and Sanitation approved the funding on condition that the water 
losses that are in the Ndwedwe system had to be fixed in order to save water that will be 
transferred to KwaChili/Shangase. Department of Water and Sanitation has approved funding 
of R163million for 2018/19 and 2019/20 financial year for the municipality to implement mains 
replacement project to address the issues of water losses. 

A detailed design is being undertaken for long term solution of the KwaChili/Shangase which 
will receiving from Umshwati (Wartburg Reservoir) in 2021/22 financial year. 

(f) MAPHUMULO LOCAL MUNICIPALITY 
(i) Imvotshane Regional Water Scheme 

The Mvotshane Dam phase 1 is commissioned and Umgeni is currently investigating 
Hlimbithwa as an alternative solution for future augmentation as part of the 

98 


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Maphumulo/KwaDukuza Sub Regional Water Scheme. The scheme is co-funded by iLembe 
District Municipality and Umgeni Water wherein Umgeni Water will focus on the 
implementation of the bulk system (including the dam) and iLembe District Municipality is 
focusing on the reticulation networks up to the standpipes / yard connections. 

The scheme will cover wards 4, 7, 8, 9,10 and 11 of Maphumulo Local Municipality and ward 
1, 2, 3, 4 and 7 of Ndwedwe Local Municipality. The full extent of the scheme stretches from 
Maphumulo, Ndwedwe to KwaDukuza ward 27. 

The scheme will serve a total of 77,900 people residing in some 17,084 households. The 
scheme is estimated to cost R 339,870,403.00 of which R 131,982,216.00 is iLembe District 
Municipality funds and R 207,888,187.00 will be funded by Umgeni Water. The first phase of 
the scheme of (6ML) was commissioned during the 2012/2013 financial year and the second 
phase of (3ML) has been commissioned by 2018/2019 financial year to make (9ML). The last 
phase of (3ML) is at 60% design anticipated to be completed in 2023/24. 

(ii) Maphumulo/ Kwa Dukuza Sub-Regional Water Scheme 
The Maphumulo/ KwaDukuza Sub-Regional Water Supply Scheme falls within Maphumulo 
Local Municipality, this is an extension of the Ngcebo/KwaDukuza Water Supply system and 
will provide wards 4, 8, 9 and 11 with portable water supply to a basic level of service. 

Balcome / Kwa Sizabantu Sub-Regional Water Scheme 

The Balcome/ KwaSizabantu Sub-Regional Water Supply Scheme falls within Maphumulo 
Local Municipality, this is an extension of the Ngcebo/KwaDukuza Water Supply system and 
will provide wards 3, 5 and 6 with portable water supply to a basic level of service. 

As at 30 June 2019 the scheme was 100% complete and some of the completed zones were 
as follows: 

• Bulk Supply phase one 

• Bulk supply phase 2 

• Zone A 

• Zone B 

• Zone C 

• Zoned E 

• Zone F 

• Zone G 

• Zone D 


99 


OO 




• Zone I & J 

The Water Supply Scheme will serve approximately 3,532 households (28,256 people) in 
Balcom and Kwa Sizabantu areas. The scheme also makes provision for the adjacent 
Magongo area in Ward 3. The scheme is estimated to cost R168, 242, 758 and was 
implemented in phases until 2017/2018 financial year and will be fully funded by iLembe 
District Municipality. 

3.10.2 SANITATION 

(a) KWADUKUZA WATER BORNE SEWER PROJECT 

The primary objective of this project is to provide a bulk sanitation system to service the 
growing needs of Groutville development areas which, besides Groutville, serves the areas of 
Thembeni, Njekane, Ethafeni, Chief Albert Luthuli Land Reform, Nyundwini and proposed 
Lloyds / Chris Hani Ntshawini Region and all located within KwaDukuza local Municipality. On 
completion, this scheme will serve a total of 129 000 citizens. 

This project is jointly being implemented by KwaDukuza Local Municipality, ILembe District 
Municipality, COGTA KZN, KZN Department of Human Settlements and the KZN Department 
of Water and Sanitation. The total cost of this staged project is R 254 million. 

(i) Southern Regional Bulk Water And Sanitation 
The municipality undertook to implement the Southern Regional Bulk Water and Sanitation 
Scheme (SRBWSS) in July of 2017. The purpose of the project is to provide bulk water and 
sanitation to the areas of Etete, Palm Lakes, Shayamoya, Nkobongo, Shakaskraal and 
Shakashead. 

In 2014, iLembe District Municipality submitted a business plan to the Department of Water 
and Sanitation requesting funding for the project. Only a partial sum of R89.7m of the 
requested budget was approved by DWS to implement the first phase of Southern Bulk 
Water and Sanitation Scheme. The total cost for phase 1 is R85 841 458.48. The remaining 
amount of R3 870 541.52 is being utilised for the preliminary design of Phase 2 and the 
business plan for the balance of the phases. 

The table below show projects that were planned and implemented during the 2018-2019 
financial year- 


100 


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A REFLECTION ON THE PERFOMANCE OF THE MUNICIPALITY IN THE DELIVERY OF WATER AND SANITATION 



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103 

















SANITATION 



















(c) WATER QUALITY 


Water and wastewater (blue and green drop systems respectively) audits have not been 
conducted by the Department of Water and Sanitation (DWS) the last few years. The last 
audits were conducted in 2012. 

However, iLembe District Municipality (IDM) water Quality department has been submitting 
the water quality data to the blue drop system and wastewater quality data to the green drop 
systems since this period. In the last two years or so, IDM has seen the commissioning of the 
Lower Tugela Water supply scheme (serving mainly Kwadukuza Local municipality) as well 
as the Mvotshane water supply scheme (serving Maphumulo Local municipality) and this that 
has seen an improvement in the water supply both in terms of water quantity and quality. 

There are still challenges in terms of water quantity supply to the Maphumulo area and a 
package plant was recently added by Umgeni Water (UW) to increase the water supply to 
Maphumulo .The challenge of quantity still remains though. Water tankers as well as 
rejuvenating of some boreholes has also assisted in improving the water supply. 

Wastewater quality continues to pose a challenge for the District .There are ten (10) 
wastewater works within the District that IDM monitors and many of them require attention. 
These range from operational to mechanical and electrical refurbishment. 

However, IDM is in the planning stages of relocating the Kwadukuza wastewater works as 
well as upgrading the Sundumbili waste water works. These 2 works are the largest within 
IDM and the changes indicated will improve the wastewater landscape within the district. 
Plans are also underway to upgrade the Darnall waste water works as well as converting the 
Gledhow wastewater works into a pump station which will relieve pressure to the receiving 
streams and rivers. 


10S 


105 



i Lem be Performance 



^ Blue Drop 
■ Green Drop 


(c) ILEMBE DM BLUE DROP PERFORMANCE 

(i) As at June 2014, 24% of the population still did not have access to clean water and 
obtained water from rivers and streams. This poses a health risk with further 
implications regarding the provision of social services. 


(ii) The urban areas have proper water borne sanitation systems, but rural areas rely on 
pit latrines or no system at all. This places tremendous strain on the environment and 
poses a health risk. 


106 


106 
































(d) Backlog Spreadsheet for 2018/19) 
(i) WATER 



I 


% decrease in backlog as at end of June 

2019 0.82% (1 604/191 369) 





































SANITATION 



CO 

o 


108 




































3.11 LOCAL ECONOMIC DEVELOPMENT 


Enterprise iLembe (El) is the Economic Development Agency of iLembe District Municipality 
that is managed by the district through a service level agreement. The agency is responsible 
for Trade & Investment Promotion and Local Economic Development for the region within the 
following key sectors: 

(a) Agriculture 

This sector is characterized by two main distinct types: 

s Commercial agriculture, such as sugar cane farming along the coastal strip ; and 
^ Subsistence agriculture in the rural hinterland and inland areas. 

(b) Manufacturing 

This sector is mainly characterized by the following types of industries: 
v Primary sector comprises of heavy industries, such as sugar and paper mill production in 
the Isithebe Industrial Estate in Mandeni 

s Secondary sector activities include light industries that are prevalent throughout the district 
and with a focus on the rural areas of the district as well as along the coastal belt. 

(c) Tourism 

iLembe is one of the prime domestic tourism attractions in South Africa due to is favourable 
climate and its excellent beaches. This sector has consistently grown in iLembe and offers a 
variety of tourism facilities that can be categorized into cultural and heritage tourism, beach 
tourism, and nature-based and adventure tourism. 

(d) Commerce and Services 

This sector includes the following sub sectors and is found in all the main urban centres 
throughout the district with specific reference to the towns of KwaDukuza and Ballrto: 
s Wholesale / retail trade Transport / storage Communication Financial / insurance 
s Real estate/Business / Community / social / government services 
Economic Development Agencies seek to combine community led action with a business 
approach, and aim to bring about social economic, environmental, regeneration and renewal 
within communities. 

The Global Economic recession and slowdown in business activity is now being felt within the 
SA economy and is clearly evident in the Business Confidence Index for (BCI) iLembe District 

109 


109 


Municipality where an all-time low was recorded at 45.5 index points during the latter part of 
2016. 

As the global economic circumstances and the difficult business climate continued to prevail, 
the challenge of addressing the high unemployment rate and the intensity of poverty in the 
district became more pressing. Enterprise iLembe has continued to play critical role within the 
District in addressing the triple challenges of poverty, unemployment, and inequality through 
the implementation of various programs and projects during the year under review. 

3.12 COMMUNITY SERVICES 

3.12.1 YOUTH, SPORTS, ARTS & RECREATION AND CULTURE 
(a) Sports And Recreation 

Indigenous Games District Selections held at KwaMaphumulo on July 2018, and there were 
no challenges reported. 

• Newcastle Championship Dance Competition that was held in July 2018 and the 
municipal bus was used to transport iLembe District dancers. 

• District Dance Competition that was held in Mandeni during July 2018, this is annual 
event whereby all KZN district dancers were competing with each other. The municipal 
bus was used to transport our district dancers. 

• Coca Cola tournament was held in July 2018 at King Zwelithini Stadium in Durban, 
where New Guilderland Combined School under 15 team was assisted through the 
provision of iLembe bus which was originally requested. 

• Indigenous Games Provincial Tournament was held in Newcastle between the 10 th and 
the 12 lh of August 2018. District transport and attire was also provided for 130 
participants, with an amount of R128 824.25 also spent by iLembe District for additional 
support. iLembe team ultimately obtained the 09 th position during the tournament. 

• Netball Male Team of 18 players was also supported by the municipal bus for their 
tournament that was held in Hoypark during the month of October 2018. 

• iLembe Cricket team attended the cricket match in Crawford (in North Coast) during 
the month of October 2018, where the municipal bus was also used to transport them. 

• Cricket T20 semi finals match that was scheduled for 21 October 2018, with the 
municipal bus also used to transport team members. 

• iLembe dance team of 22 dancers was assisted with municipal bus to attend their 
provincial competition during the month of November 2018. 


no 


110 


• iLembe Golf Team of 18 players was assisted with municipal bus to attend their game 
in Pietermaritzburg in relation to SALGA Games preparations for December 2018. 

• iLembe District Municipality hosted Provincial Disability Games on the 9 -11 November 
2018, where the District provided team iLembe with tracksuits and the municipal bus.. 

• The District participated during 2018 SALGA KZN DSR Games, with a total number of 
240 athletes. The tournament was held between the 6 ,h and the 10 th of December 2018 
in Pietermaritzburg. Procurement of accommodation, apparel and four buses with an 
amount of R1 485 536 .74 was also utilized by the District. 

• iLembe Cricket team of 18 players was assisted with municipal bus to attend their game 
in Durban during the month of January 2019. 

(b) Heritage And Cultural Programmes 

Indoni Camp was held between the 01 st and 06 lh of July 2018 in Pietermaritzburg. 

Delegation of our young girls was part of the camp where teachings of respect and 
restoration of good moral values were done. iLembe District bus was utilized to support 
them. 

• Mazibuye choral music requested the municipal bus to attend the Ndwedwe 13 th Annual 
2018 SATMA Awards prayer that was held at Ndwedwe area, with iLembe bus utilized 
during the event. 

• iLembe District Municipality attended Umkhosi Womhlanga at a eNyokeni Royal Palace 
in KwaNongoma between the 7 th and the 9 lh of September 2018. As a municipality we 
were expected to provide 4 buses for maidens and accommodation for officials and 
councilors, and the total amount spent for the event was R152 124. 

• iLembe District Municipality transported Amabutho from iLembe to Umkhosi weLembe 
which was held at Moses Mabhida Stadium on the 7 ,h of November 2018. 

• The Mazibuye Choral Music Group of 22 young people requested to be transported by 
iLembe bus during the month of November 2018. 

• Indoni National Competition was held on the 15 th of December 2018 at Durban ICC. 
iLembe was made proud by Thabisile Mthethwa who got position the first position of 
2018 Miss Indoni, with the young lady coming from Mandeni. 


(c) Other Youth Empowerment And Development Programmes 


MONTH 

ACTIVITY 

TARGET 

1 

July 2018 

Career Expo 

300 Matric Learners 

August 2018 

None 

None 


in 




Sept. 2018 

Master Class Theatre Workshop 

40 young people were targeted and the 
programme was in partnership with KZN DAC 

_ 

Oct. 2018 

Maskandi Final Competition Talent 
Search 

6 groups of Maskandi boys 

Nov. 2018 

Plumbers Learner ships 

8 young people were given the opportunity in 
plumbing with a stipend of R3000 per month j 

Dec. 2018 

None 

None 

Jan. 2019 

iLembe Back to School Programme 

240 learners across the district benefited from 
the program with school uniforms, school 
shoes and small grocer 

Feb. 2019 

None 

None 

March 2019 

None 

None 

April 2019 

iLembe District Career Exhibition 

iLembe District Matric learners (four 
municipalities) 

May 2019 

Child Protection Campaign 

iLembe District learners (four municipalities) 

June 2019 

None 

None 

_____1 


3.12.2 DISASTER RISK MANAGEMENT 

(a) Status Of The District Disaster Management Centre 
iLembe District has a functional District Disaster Management Centre (DDMC) which 
is established in terms of Disaster Management Act No. 57 of 2002. The various 
institutional measures have been established to ensure compliance with disaster 
management legislation and policies with the Head of the Centre appointed. The 
District Disaster Management Centre has been constituted with the objective to 
promote an integrated and coordinated system of Disaster Management, with a 
special emphasis on prevention and mitigation. The establishment of the District 
Disaster Management Centre also aims to respond rapidly and effectively to all 
disasters including implementation of post-disaster recovery and rehabilitation within 
the District and its family of municipalities. The District Disaster Management Centre 
building for iLembe was completed in 2015 and is situated at No 12 Haysom Road, 
KwaDukuza. 


112 


112 























(b) Municipal Disaster Management Inter-Departmental Committee And Political 
Committees 

The District has the responsibility of establishing effective institutional arrangements 
for the development and approval of integrated disaster risk management matters. To 
achieve this, the District has established an Economic Development and Planning, 
Health and Safety Portfolio Committee, which is an internal portfolio committee that 
deals with matters relating to Disasters and Disaster Risk Management in the District. 
The committee is chaired by the District Deputy Mayor and is fully functional. It meets 
regularly on a monthly basis or as and when it is necessary. The District has also 
established the Management Committee (MANCO), this is a senior management 
committees which meets every two weeks where issues pertaining to disaster 
management are being discussed on an ongoing basis. 

(c) District Disaster Risk Management Practitioners Forum 

iLembe District Disaster Risk Management Practitioners forum has been established 
and comprises of all four (04) Local Municipalities. The main objective of having 
practitioners meetings (that are held on monthly basis) is to share some of the common 
challenges, whilst learning from each other’s best disaster management practices. 
During the period under review , the District conducted a total number of eleven (11) 
Disaster Management Practitioners meetings. 

(d) Municipal Disaster Management Advisory Forum (DMAF) 

The District Disaster Management Advisory Forum (DDMAF) is a fundamental disaster 
management IGR structure that gives platform for interaction between all relevant role- 
players and stakeholders responsible for disaster risk management. The DDMAF is 
functional, with a reasonable attendance by relevant stakeholders; however there is 
still an absence of a large number of stakeholders who could contribute significantly. 
The District Disaster Management Advisory Forum is a body in which all role players 
consult one another and coordinate their actions on matters relating to disaster 
management within iLembe District and meets on quarterly basis or as and when 
necessary. A total of four (4) District Disaster Management Meetings were held during 
2018/19 financial year. 

(e) Status Of Disaster Management Capacity At ILembe District 

iLembe District has established a fully functional District Disaster Management Centre 
(DDMC), with the Head of the Centre appointed, including disaster management 

113 


113 



personnel to support the Centre. Currently, at a district level there is one (1) Senior 
Disaster Risk Reduction Officer and two (2) Disaster Management Officers. All vacant 
positions have been prioritized accordingly, with plans underway to fill other positions 
in line with strict austerity measures of the municipality. To ensure effective 
implementation of the Disaster Management Act, the District has also allocated 
physical and financial resources to make sure that there is an effective smooth running 
of the Disaster Management Centre. 

(f) STATUS OF ILEMBE DISTRICT PLANS 

1. District Disaster Management Framework 

In compliance with the Section 42 of the Disaster Management Act, which compels 
each district municipality to establish and implement a disaster management 
Framework that is aimed at ensuring an integrated and uniform approach to disaster 
management, iLembe District Disaster Management Policy Framework was developed 
in 2008, and was consistent to both Provincial and National Disaster Management 
Frameworks. The District Disaster Management Policy Framework is based on the 
nationally accepted four key performance areas (KPA) each of which is underpinned 
by three “enablers” that facilitate a consistent approach to the function. The District 
completed a process of reviewing its Disaster Risk Management Policy Framework 
during the 2016/17 financial year. 

2. District Disaster Management Plan 

The Disaster Management Plan is crucial for the District since the Municipal Systems 
Act No. 32 of 2000 requires all municipalities to undertake an integrated development 
planning process to produce currently relevant Integrated Development Plans (IDPs). 
The applicable Disaster Management Plan is a core component of the IDP as stipulated 
by Section 26 (g) of the Municipal Systems Act No. 32 of 2000. Furthermore, Section 
53 (2) (a) of Disaster Management Act stipulates that a disaster management plan for 
a municipal area must form an integral part of the municipal IDP. To achieve this, 
iLembe District developed its Disaster Management Plan in 2009 which was approved 
by the Council. The District also reviewed its Disaster Management Plan over a period 
of three years (2014-2017), and this culminated in the adoption of the reviewed disaster 
management plan in June 2017. During 2018/19 financial year, the District also 
reviewed its Disaster Management Plan through incorporating the requirements of the 
Disaster Management Act No 16 of 2015. One of the key considerations during the 

114 


114 



review process included incorporation of the Climate Change Impacts, which was a 
process which was implemented in consultation with various disaster management 
stakeholders and role players. This process culminated in the development of Risk 
Maps which were internally generated by iLembe GIS Unit. 

To date, all four Local Municipalities have since developed their Disaster Management 
Plans that have been adopted by their respective Councils. The District has taken an 
approach to assist all four local municipalities to review their disaster management 
plans in house, with the process already initiated at Ndwedwe Local Municipality. 

(g) State Of Readiness To Deal With Disasters 
iLembe District is prone to a number of natural and menmade hazards such as heavy 
rain, lightning, strong winds, fires and hail resulting in devastating effects to both human 
life and property. The District Disaster Management Centre (DDMC) remains to act as 
a source and conduit for information on disasters and impending disasters within the 
District as required by Enabler 1 of the National Disaster Management Framework. To 
properly understand the spatial and geographical orientation of hazards, all disaster 
management practitioners continue to capture, monitor and analyze minor and major 
incidents on an ongoing basis. As and when incidents are reported, the District Disaster 
Management Practitioners are able to assist local municipalities to ensure that there is 
prompt response, with damage assessments undertaken to determine the extent of 
damages and assistance required by the affected municipalities. 

The District Disaster Management Centre is one of the beneficiaries of the Early 
Warning System, with Weather Warnings received from the South African Weather 
Service (SAWS). All disaster management practitioners have a responsibility to 
disseminate early warnings to vulnerable communities, with some of the key recipients 
including Ward Councillors, Amakhosi, Izinduna etc. As required by the Disaster 
Management Act No 57 of 2002, the District prepares Summer and Winter Season 
Contingency Plans before the beginning of each season. The District Disaster 
Management Centre also ensures that all four local municipalities (Mandeni, 
KwaDukuza, Maphumulo and Ndwedwe) also prepare their Contingency Plans that are 
unique to their respective municipalities. 


its 


115 



(h) Financial Capabilities To Deal With Disasters 

During 2018/19 financial year, the District Disaster Management Centre budgeted 
for the following Disaster Risk Reduction Programmes: 


ITEM 

BUDGET 


(2018/19) 

1. Emergency Relief Aid (Blankets, Food Parcels and 

R 378 242.00 

Plastic Sheeting) 


2. Emergency Relief Aid (Temporary Shelter) 

R 221 604.00 

- - - 

3. Community Awareness Campaigns 

R 136 167.00 

4. Capacity Building Programmes 

R 50 433.00 

5. Review Of The District Disaster Management Plan 

R 378 242.00 

6. Installation Of Lightning Conductors 

R300 000.00 


It is important to mention that the District Disaster Management Centre achieved 100% 
of all the set targets as set out in the SDBIP (doing more with less), through 
implementing strict fiscal discipline by adhering to the austerity measures that are set 
out by iLembe District Municipality. The Provincial Disaster Management Centre also 
assisted the district by proving additional blankets, plastic sheeting and Box B relief 
(which includes gel stoves, pots and cutlery sets). 

(i) STATUS AND RESULTS OF DISASTER RISK ASSESSMENTS UNDERTAKEN 
1. List Of Priority Risks (Hazards) 

iLembe District Municipality is prone to a number of natural and men-made hazards 
such as (veld fires and structural fires), heavy rain, lightning, strong wind, drought, road 
and railway accidents etc. In complying with the requirements of the Disaster 
Management Act No. 57 of 2002, it is important to conduct the Risk Analysis in order 
to identify and prioritize potential hazards and threats that are likely to occur within the 
District. The vulnerability of communities within the District varies, which mainly 
depends on socio-economic status as well as the exposure of particular households or 
communities to specific hazards. Below is a list of priority hazards in all four local 
municipalities, with spatio-temporal characteristics of these hazards well known since 
they have been observed and recorded over a period of time: 


116 


116 




Table 8: Priority hazards identified at iLembe District Municipality. 


HAZARDS 

LOCATION 

1 . 

Severe weather: 



a Lightning 

In all Four Local Municipalities 


b. Strong winds 

In all Four Local Municipalities 


c Hai! 

In all Four Local Municipalities 


d. Heavy rain 

In all Four Local Municipalities 


e. Extremly hot temperatures 

In all Four Local Municipalities 


f. Storm surges 

Along the Coast 

2. 

Fires (Structural and Veld Fires) 

In all Four Local Municipalities 

3. 

Drought 

In all Four Local Municipalities 

4. 

Accidents (Motor Vehicle Accidents) ! 

Mostly on N2, R74, P711, R102 and 

P459 

5. 

illegal Connection of Electricity 

In all Four Local Municipalities 


2. INCIDENT STATISTICS 

(a) Incidents Reported During 2018/2019 Financial Year 


3 

c 



CAUSE OF AN INCIDENT 




z 

o 

“0 

> 

r* 

Structural 

Fire 

Heavy Rain 

Strong 

Wind 

Lightning 

| 

Structural 

Collapse 

i 

Hail 

Floods 

i 

i 

KwaDukuza 

66 

14 

16 

' 

7 

1 

0 

2 

106 

Mandeni 

26 

i 

9 

10 

8 

1 

0 

0 

i 

54 

Maphumulo 

14 

4 

: 3 

26 

0 

0 

0 

47 ‘ 

Ndwedwe 

32 

13 

13 

8 

0 

1 

0 

67 

ILembe 

District 

138 

40 

42 

49 

2 

1 

; 2 

274 


117 


117 


TOTAL 






























3. DITRICT DISTRIBUTION OF INCIDENT FOR 2018/2019 FINANCIAL YEAR 


iLembe District Municipality: 

Distribution of Incidents 1 July 2018 - 30 June 2019 



Heavy Rainfall, 40, 
14,6% 


Floods, 2, 
0,7% 


Hail, 1, 
0,4% 


Strong Wind, 42, 
15,3% 


/ Lightning, 49, 

17,9% 

Structural Collapse, 

2 , 

0,7% 


4. IMPACT OF INCIDENTS DURING 2018/2019 FINANCIAL YEAR 


Impact of Incidents Per Local Municipality 
1 July 2018-30 June 2019 

KwaDukuza Mandeni H Maphumulo BNdwedwe 


Injuries 




People Affected 


Households Affected 


m 


m 

■■ 


o % 




mm 


t 




Oi(Uh 




119 


224 






!—h-r—-;-r--1-:—-i—-----i---1--i--( • 

10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 


118 


118 

























5. TREND OF INCIDENTS DURING 2018/2019 FINANCIAL YEAR (IMPACT TO 
HOUSEHOLDS AND PEOPLE) 



i kxsitt d Hcwfxidi Wffj-J ehurittoffcacfcAffati 


0) Community Awareness Campaigns 

iLembe District is prone to a number of natural and man-made hazards that have a 
huge impact on both human life and the environment, and often requires the 
intervention of the Disaster Management Centre’s as they are always unpredictable. 
It is in this view that the District has adopted a strategy of increasing awareness about 
the risks that are prevalent within the District and its family of municipalities. The 
community awareness programme has been developed in line with the provisions of 
the Disaster Management Act No. 57 of 2002, the Provincial Disaster Management 
Framework of 2010 and the National Disaster Management Framework of 2005. It is 
important to mention that all awareness campaigns that are conducted are unique to 
specific audiences, and this in mainly dependent on the nature of their vulnerability to 
certain risks and hazards. 

All awareness campaigns conducted are also in line with Enabler 2 of both the National 
and Provincial Disaster Management Frameworks, whilst they remain a critical 
component of disaster risk reduction. Other considerations that are key during ongoing 
community awareness campaigns also include some of the best world practices 
including Millennium Development Goals and the Sendai Framework for Disaster Risk 

119 


119 











Reduction. The District has also adopted a strategy to conduct ongoing community 
awareness campaigns In partnership and in collaboration with a number of disaster 
management stakeholders. Some of the critical stakeholders include local 
municipalities, sector departments, traditional leaders, media, Councillors, Ward 
Committees etc. It is also important to mention that ongoing community awareness 
campaigns are conducted to assist local communities to exercise risk avoidance 
behaviour, whilst taking necessary precautionary measures at all times. The District 
Disaster Management Centre has also adopted a strategy to conduct ongoing 
awareness campaigns in an integrated manner, through utilising some of the existing 
municipal public participation programme. The District Disaster Management Centre 
exceeded its targets as set out in the municipal SDBIP as it conducted twenty eight 
(28) planned community awareness campaigns during 2018/19 financial year. 

(k) Capacity Building Programmes 

The capacity building programme is one of the approaches taken by iLembe District to 
comply with the provisions of the Disaster Management Act No. 57 of 2002, including 
both the Provincial and National Disaster Management Frameworks. Such training 
programmes are crucial in increasing the numbers and competencies of disaster 
management practitioners, as well as increasing the overall humanitarian skills and 
knowledge of local disaster management stakeholders and communities. iLembe 
District has adopted the approach of working together with different stakeholders in 
order to assist disaster prone communities to develop the knowledge and necessary 
capacities towards the implementation of disaster risk reduction programmes. 

The developed capacity building programme is also aimed at promoting the culture of 
risk avoidance among stakeholders through integrated disaster risk management 
education and training. All capacity building programmes are also critical towards 
achieving the requirements of Enabler 2 of the National Disaster Risk Management 
Framework. The District conducted at total number of seventeen (17) planned capacity 
building programmes during 2018/19 financial year. 

(l) Best Practices / Achievements / Successes 

There are various best practices that are implemented by the District Disaster 
Management Centre. Below are some of the disaster management best practices 
that were undertaken by the District: 


120 


120 



• The District has partnered with the Provincial Disaster Management Centre 
(PDMC) in encouraging vulnerable communities to buy lightning conductors. 

• The District has also encouraged all focal municipalities to budget for disaster 
management, including budget for disaster risk reduction programmes such as the 
installation of lightning conductors. 

• To date, Maphumulo Local Municipality in partnership with PDMC and the District 
has installed a total number of two hundred and five (205) lightning conductors to 
vulnerable communities, with forty (40) installed at Ndwedwe Local Municipality, 
fifty eight (58) in KwaDukuza Local Municipality and fifty five (55) at Mandeni Local 
Municipality. 

• Through ongoing capacity building programmes by the District, the Local 
Municipalities have committed to budget for disaster management, including 
alignment of the disaster management sector plans into their Integrated 
Development Plans (IDPs). 

• The District has initiated the process of incorporating issues that are mentioned in 
the Disaster Management Amendment Act 16 of 2015 as part of reviewing the 
District Disaster Management Plan, and this includes Climate Change Impacts. 

• In fulfilling the requirements of the Safety at Sports and Recreational Events Act, 
the District is actively involved in all stages leading to minor and major events, in 
an effort to ensure safety of communities during such events. 

• The District Disaster Management Centre is one of the key stakeholders that are 
involved in all District Climate Change interventions, especially Climate Change 
Adaptation. 

• In fulfilling the requirements of the Safety at Sports and Recreational Events Act, 
the District is actively involved in all stages leading to minor and major events, in 
an effort to ensure safety of communities during such events. 

(m) Challenges And Concerns 

• Lack of Firefighting capacity within the District and its family of municipalities, 
especially at Ndwedwe and Maphumulo Local Municipalities 

• Poor attendance by the sector departments/other spheres of government poses 
a risk of not addressing all consultative activities on issues concerning disasters 
and disaster management in the District. 

• The state of readiness is questionable in local municipalities where there are no 
budget provisions for disaster management. In instances where such budgets 

121 


121 



exists, the extent to which they are being utilized for disaster risk reduction must 
be communicated to all relevant stakeholders. 

• In responding to minor and major incidents, there is generally a poor co-ordination 
(including response time) in the municipalities where there is a limited number of 
personnel who are employed to deal solely with disaster risk management. 

(n) Status Of Fire Services 

In line with the Disaster Management Act, Section 54 (3): (a) the municipality have a 
responsibility for coordination and management of disasters and must deal with a local 
disaster in terms of existing legislation and contingency arrangements if a local state 
of disaster has not been declared, (b) in addition to the above section 55(2) deals with 
instances where a local disaster has been declared. Currently, at iLembe District, only 
KwaDukuza and Mandeni Local Municipalities have establish mechanisms for 
firefighting capacity. KwaDukuza is performing the firefighting function in house with 
two Fire Stations that are located in Ballito and Stanger. Mandeni have outsourced the 
service to a Service Provider for a period of three years, where there is an expectation 
of skills transfer once the contract has expired. One of the challenges is that there is 
no firefighting capacity at Ndwedwe and Maphumulo Local Municipalities. This scenario 
poses major challenges as there is lack of prompt and effective response to fire 
incidents at Maphumulo and Ndwedwe Local Municipalities as illustrated in table 5 
below. 


Municipality 

Responsibility 

Firefighters 

> 

“i 

CD 

CD 

i 3 

Capacity 

(Equipment) 

Mandeni LM 

Outsourced 

14 x Fire Fighters, 

545 km 2 

1 x Medium Fully Equipped 


To The 

1 x Chief Fire Officer, 


Fire Engine 


Service 

Volunteers 


1 x Rapid Response LDV 


Provider 



4x4 Skid Unit 

KwaDukuza 

KwaDukuza 

Chief Fire Officer (1), 

735 km 2 

4 Rescue Vehicles 

LM 

LM 

Divisional Officer (1), 


1 Skid Unit 



Station Officers (2), 


5 Utility Vehicles 


Fire Fighters (72) 


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Municipality 

Responsibility 

Firefighters 

Area km 2 

Capacity 

(Equipment) 

Ndwedwe LM 

IDM/KDM 

Nil 

1093 

Nil 




km 2 


Maphumulo 

IDM/KDM 

Nil 

896 km 2 

Nil 


LM 

iLEMBE NIL 
DISTRICT 

The District has developed a long term plan (aligned to the I DP) to ensure 
establishment of firefighting capacity, especially at Ndwedwe and Maphumulo Local 
Municipalities. The District continues to engage other external stakeholders to assist 
towards the full establishment of fire fighting services within the distrcit, in complying 
with Section 84 (j) of the Municipal Structures Act. 

(o) Climate Change Interventions 

Section 24 of the Constitution (Act of 1996) of the Country compels the environmental 
sector to manage environment such that is does not become harmful to the wellbeing of 
all South African Citizens. Furthermore, chapter 3 of the Constitution provides for the 
cooperative governance by compelling the different spheres of government to cooperate 
and consult with one another to ensure cooperative governance. This constitutional 
perspective supports the principles of integration, participation and cooperation that are 
fundamental to working towards sustainable development. In responding to the 
resolutions of the previous Disaster Management and Climate Change workshop as well 
as the recent Back to Basics with Disaster Management Workshop, the District has 
established iLembe Environmental Management Forum (IEMF) to basically, promote 
coordination and integration of plans and programmes for the benefit of the local people. 
The main purposes of the iLembe Environmental Management Forum (IEMF) is to 
facilitate the coordination of environmental management matters and to encourage 
compliance to the existing legal tools ranging from focal, provincial, national and the 
international context. 


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3.12.3 SPECIAL PROJECTS 

(a) OPERATION SUKUMA SAKHE PROGRAMMES FOR VULNARABLE COMMUNITIES 


(i) Programmes For Children 

There were ongoing children’s programs aligned to the KZN Provincial Calendar. Those 
programs included Child Protection Awareness where schools identified to have substance 
abuse challenges were visited throughout the district. Programs targeting ECDs were also 
implemented like cultural day for ECDs. Back to school campaigns were also held in 
collaboration with Operation Sukuma Sakhe where needy children were assisted with basic 
school necessities. 

(ii) Programmes For Women 

Programmes for women were implemented as per the financial year annual plan. The 16 Days 
of Activism campaigns fighting abuse of children and women were conducted throughout the 
district jointly with the SALGA Women’s Caucus (SWC). There were skills training programs 
that capacitated women for job creation and income generation. 

(iii) Programmes For Men 

During July, programmes targeting men and young boys were held to give boys that are raised 
by mothers an opportunity to interact with men and have a feel of a father figure on discussions 
for boys to men. Dialogues that involved Amakhosi and men and social activities were 
conducted during the Men’s month. 

(iv) Programmes For Senior Citizens 

There is a functional Senior Citizens Forum that work closely with the municipality on matters 
for the Senior Citizens. An on-going programs that promote healthy living lifestyle of Senior 
citizens were held and they participated in Golden games to the national level where they 
participated in games. Programs around the International Day against elderly abuse were held. 
During the human rights month elderly were taught about their rights and the importance of 
reporting whatever unsettle them. 

(v) Challenges Relating To Gender Programmes And People Living With Disabilities 
There are limited challenges pertaining to programmes for people living with a disability 
because the Forum for people living with a disability work closely with the municipality. The 
gender annual plan included programs for the sector and they are fully participating on the 
planned programmes. 


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(vi) Operation Sukuma Sakhe (OSS) & HIV And Aids Programmes 

OSS is functional with challenges and it differs from municipality to municipality, however 
some of the Health Promotions are done with the with OSS municipal Bakkie to assist with 
HIV/AIDS activities. 

(vii) Operation Sukuma Sakhe (OSS) And HIV/Aids Programmes Implemented During 
2018/19 Financial Year 

Monthly HIV/AIDS awareness programmes are conducted in all local municipalities, working 
closely with Department of Health and as per the requests from Wards and Civil Society. 
Operation Sukuma Sakhe (OSS) planned programmes like School’s Functionality, Public 
Service Volunteer Week (PSVW), 16 Days of Activism Launch against women and children, 
World AIDS Commemoration for the financial year were conducted with limited budget during 
the period under review. 

(viii) Functionality Of The District Aids Council (DAC’S) And Local Aids Councils 
(LA’S) 

During 2018 / 2019 financial year, the DAC was fully functional, as all Quarterly meetings were 
held, whereby such a structure was also utilised to adequately prepare for the Provincial 
Council On Aids quarterly meeting, which is being chaired by the Premier Of Kwa-Zulu Natal. 
However, during the period under review, challenges were experienced relating to the non¬ 
functionality of Local AIDS Councils (LACs). In most instances, the DAC Chairperson (who is 
the Honourable Mayor Of The District) had to intervene since poor functionality of such 
structures at a local level had an adverse effect to the District Report which get presented by 
the District Mayor in the quarterly meetings on Provincial Councils On Aids (PCS’s. The District 
Civil Society remains one of the critical structures within the District and its family of 
municipalities, as it also provides ongoing support to all LAC's, and this includes mentoring 
various structures to ensure fully functional Ward Aids Council (WAC's) structures. 

(ix) Moral Regeneration And Social Cohesion Programme (MRM) 

The district MRM was launched in November 2019 and received warm welcome from the 
politicians. The Annual plan for MRM was presented to the district and the budget for MRM for 
2019 / 2010 financial year was included in the municipal budget. 


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OVERALL ACHIEVEMENTS 


• Improvement of attendance of officials in OSS programmes has been noticed and 
that has led to the slight increase in the number of functional War Rooms. 

• War Rooms have been established in all wards, although there is no consistency 
in terms of their functionality. 

• War Rooms have been established in all wards, with poor functionality also posing 
a challenge. 

• Political leaders have clear understanding on how OSS operate and are 
championing all war rooms 

• Local Municipalities are implementing OSS programmes i.e. HIV/AIDS and poverty 
alleviation. 

• The DTT is functional with annual programmes being implemented in all wards 

• Sector Departments are represented at the District Task Team of the OSS. 

• Civil Society programmes have been aligned to OSS 

• OSS empowerment programmes have been rollout to the community with different 
life skills. 

• Public Service Volunteer Week gets implemented on an annual basis in all local 
municipalities. 

• The District Municipality is striving to ensure that all the war rooms are functional 
and address the issues affecting the communities. 

• MuniMec Resolution that was recently taken towards ensuring that Operation 
Sukuma Sakhe forms part of the performance agreements of all Section 56/57 
Managers. 

CHALLENGES 

• Budget to implement OSS programmes remain a challenge however services that 
do not require funding are rendered. 

• Some of the War Rooms are dysfunctional due to poor attendance of Sector 
Departments which leads to the cancellation of scheduled meetings. 

• Poor functionality of Local Aids Councils in most local municipalities. 

• Late submission and non submission of reports by various officials (including, but 
not necessarily limited to Sector Departments). 

• Poor attendance by Sector Departments in most War Room Meetings. 

• Financial constraints in Sector Departments which leads to interventions not being 
implemented. 


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• No physical structure for some of the War Rooms. 

• Due to the topography and vastness of the wards in some instances does not allow 
the ward committee members to visit War Rooms. 

• Although local communities get profiled, they are generally dissatisfied with poor 
implementation of identified interventions by relevant Sector Departments. 
Interventions. 

• Lack of dedicated personnel dealing mainly with Operation Sukuma Sakhe, 

* 

remains one of the major challenges in most of the local municipalities. 

3.12.4 MUNICIPAL HEALTH SERVICES 
3.12.4.1 BACKGROUND 

Municipal Health Unit is charged with the responsibility of providing Environmental Health 
Services to the community of the District as well as monitoring the health and safety of the 
District Municipal employees. Municipal Health Services (MHS) as defined under the National 
Health Act, 2003 (Act No. 61 of 2003) comprise of inter alia, food control, water quality 
monitoring, waste management, health surveillance of premises, environmental pollution 
control, communicable disease control, disposal of the dead and vector control. Environmental 
Health Practitioners are therefore responsible for carrying out measures for protecting public 
health, including administering and enforcing legislation related to health and providing support 
to minimize health and safety hazards. Some of activities involved includes inspecting food 
facilities, investigating public health nuisances, and implementing disease control Measures, 
conducting work place safety assessments and accident investigation. 

During the beginning of the financial year 2018/2019, the unit documented up the annual 
targets on duties that were to be performed and achieved by the end of the year. The targets 
were made out of competencies ranging from food control activities, water quality monitoring, 
communicable disease control, vector control disposal of the dead and pollution control. 

Hereunder are some of activities we acted upon which forms major parts of our targets that 
were the highlights during financial the year 

(a) Sale of Fake / Counterfeit and or Expired food stuff incidents. 

During the year 2018/19, South Africa and Health fraternity in particular were shaken by 
foodstuff that surfaced from the social media and described as fake, counterfeit, harmful food 
colourants and expired foodstuff which lead to various protest incidence. 


n? 


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“Fake eggs being manufactured; fake eggs being cooked; fake plastic rice and fish; fake beef; 
fake mutton; coke 1,25L with some moving things inside; Fanta grape 1.25L label; Stoney 
ginger beer no size indicated; Fanta orange 1.25L; twist granadilla 2L; tonic water 1L; Valpre 
Spring water; Albany brown bread and Blue Band margarine; syrup being sold as honey; baked 
beans in a tin fish and amasi labelled as inkomzi were some of the scene observed.” 

Although most these incidence were prevalent in Johannesburg, the whole country was 
anxious and the iLembe District was not spared. In order to prevent the occurrence of similar 
incidents /nature in our district, we had to come up with a plan /or strategy to curb the spread. 
The plan lead to a number act and blitz that were conducted checking all food retailers, tuck 
shops, supermarkets, wholesalers etc. Operation Fiela Food Blitz as it was called, was carried 
out in the Mandeni and KwaDukuza area on the (10-11 September and 14 September) 
respectively, as our Environmental Health unit issued several fines and confiscated banned, 
expired and fake goods. 

These inter- departmental Operation Fiela was as a result of a National directive of the National 
Minister of Health Aaron Motsoaledi, to conduct food blitzes related to concerns of food safety. 
Blitz were carried out in conjunction with other stakeholders namely (SAPS, Crime Prevention, 
Town Planning and Building Control Unit. Liquor Authority, building inspectorate, fire and 
emergency services, Home Affairs (immigration), and business licensing teams). 

(b) KwaDukuza Blitz 

KwaDukuza blitz was initiated in partnership with Business Licensing Authority to embarked 
in a raid exercise on the 14/09/2018 to visit food and non-food premises, which is Item 1 as 
per the Business Act of 1991, Health Act 61 of 2003 and Foodstuffs Cosmetics and 
Disinfectants Act 54 of 1972 (Regulation 638 and 146). 

The operation was aiming at enforcing the Law to businesses that do not comply with 
particular legislations and issue fines and notices for contraventions of the Law. A total of 15 
Business premises were visited in KwaDukuza CBD and Ntshawini area. 


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(i) The Following findings transpired. 


Item 

: 

Joint Provincial or Municipal 
Operations 

A coordination structure was activated 

Yes 

Number of Joint Operations that Environmental Health 

1 

undertaken 


Total number of premises reached during the Joint 

12 

Operation 


Number of Premises operating without a valid Health 

9 

Certificate 


Number of Premises issued with Notices to seize 

0 

I 

operations 


Number of Premises found to be Non-Compliant 

9 

i Number of Compliance Notices issued 

1_._. 

; 9 


(ii) Report on actions taken 


Item/ issue 

Quantity 

Number 

Kilograms 

Litres 

Foodstuff Seized 

23 

21kg 


Foodstuff Detained 





Number 

Number of Production Facilities inspected 

0 

— 

Number of Implicated products found 

0 

Number of health awareness campaigns 

conducted 

9 

Total number of people reached 

13 


(c) Mandeni blitz 

Similar plan as the KwaDukuza blitz, the Mandeni version was conducted from the 11 -12 
September 2018 and attended by various Department and law enforcement agencies. Among 
those were the KZN Dept, of Economic Development, Tourism and Environmental Affairs, 
Department of Labour, Business Licensing/LED Mandeni, Fire and Safety, Building Control, 
Traffic Law Enforcement and Town Planning. 


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(i) Findings were 

A coordination structure has been activated 

Yes 

Number of Joint Operations that Environmental Health undertaken 

1 

Total number of premises reached during the Joint Operation 

17 

Number of Premises operating without a valid Health Certificate 

2 

Number of Premises issued with Notices to seize operations 

1 

Number of Premises found to be Non-Compliant 

9 

Number of Compliance Notices issued 

9 


Item / issue 

Quantity 


Number 

Kilograms 

Litres 

Foodstuff Seized 


400kg 

55 

Foodstuff Detained 





Number 

. Number of Production Facilities inspected 

0 

Number of Implicated products found 

0 

Number of health awareness campaigns 

0 



conducted 



j 

Total number of people reached 

0 


(d) Mandate 

Environmental Health Services has a legislatively mandated to conduct compliance monitoring 
and enforcement relating to food safety and related matters. The unit conducts routine 
inspections of all formal and informal food premises such as supermarkets, convenience 
stores, coffee shops, bakeries, retail meat markets, food processing plants, food warehouses, 
restaurants, take-away’s, taverns and informal food traders. 

Because Foodborne illnesses can be caused by improper food handling practices, inadequate 
temperature control, poor food storage practices, improper cleaning of equipment and utensils 
including food labelling and expired foods. The health unit inspections aims to protect public 
health by working to minimise adverse impacts on human health. This is also accomplished 
through health inspections, health education and enforcement. 

Food premises inspections are conducted up to four times a year, depending on the risk level 
and complexity of the premises. 


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(e) Listeriosis Outbreak 

Listeriosis was also another highpoint of the year where a number of people were stunned. 
The District saw a number of cases being prevalent reported and followed up. 

Cases came from areas such as Lindelani in KwaDukuza, Dark City and Endulinde in Mandeni. 
These then required that our officers investigate each and every case that was reported and 
conduct inspections and awareness campaign to alert communities on the disease, mode of 
transmission and prevention measures. 

All food retailers, supermarket, wholesaler, factories (food processing plants being audited: 
KwaSizabantu dairy farm and Boxer processed meats plant), and tuck shops had to be 
inspected and the implicated food stuff such as polonies, Vienna's, etc. from suspected 
factories were removed and destroyed at an approved land fill site. Environmental health 
Samples were also taken to laboratory for analysis. Result were shared with the affected 
parties. 

Schools, churches, and other community venues were some of the areas that were visited to 
make sure that people were made aware of this disease and are well acquainted with adequate 
measures and information to prevent the spread by avoiding those infected food products and 
returning those that were already purchased to the retailers obtain from. Detailed reports had 
to be forwarded to council and also to the National Department of Health to facilitate monitoring 
and surveillances. 

(f) Vector Control 

The outbreak and spread of communicable diseases by vectors and pests such as malaria, 
cholera, plague, etc. are prevented by vector control programmes. This is done mainly by 
controlling their habitats and breeding places. When complaints are reported, an investigation 
is done: vectors (rodents or mosquitoes, flies and other pests), their habitats or breeding places 
are identified: and remedial or preventative measures are instituted to eradicate the vectors. 
600 breeding site were investigated and exterminated. 

(g) Rabies Outbreak 

Storming from a number of incidents of dog bites and confirmed positive rabies cases 
reported in the District, such as the two children that died as a result of this rise in animal 
rabies i.e. 


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A three-year-old boy on holiday with his family in Blythedale Beach that passed away following 
an attack by a feral cat, which followed the first human death in the District that took place in 
September 2017 involving a six-year-old boy who was bitten by a dog in Ndwedwe (eSdumbini 
area) Ntabamhlophe and Various other incidences that were reported in areas such as 
Masomoco in Mandeni, re infected cow/ bovine, Maphumulo (7 infected cows/ bovine) couple 
with others scattered rabid dog bites incidences within the district. 

Our office in conjunction with the department of Agriculture and Rural Development had to 
intervene by conducting mass vaccination and awareness's campaign in the district order to 
curb the spread 

According to the National Department of Health, the Rabies outbreak in KZN started in King 
Cetshwayo District in the North Coast and then spread South through iLembe and eThekwini. 

Rabies are a fatal viral encephalitis disease transmitted by the bite of an infected animal {>95% 
from dogs) with virus laden saliva entering the wound and attacking the nerve cells. Once 
bitten people are advised to wash the wound immediately with soap and place under running 
water for five to ten minutes. Death is preventable once disinfectant has been applied and 
follow-up pa 

In KZN, dogs and cats are the main source of the disease (>80%) and are required to be 
vaccinated by law. 

(h) Achievements 

(i) Air Quality Monitoring 

The section strives to reduce air pollution and improve the quality of air by identifying, 
investigating and monitoring pollution sources, and instituting remedial or preventative 
measures. The designated Air Quality Officer of the district ensures compliance with the Air 
Quality Act. The Unit was able to come up with an Air Quality Monitoring station, this was 
achieved through a good support and working relationship with the KZN Department of 
Tourism and Environmental affairs (EDTEA) who assisted in installing a Continuous Air Quality 
Monitoring Station in Ballito at the iLembe Enterprise Offices and at Siqumbe in Mandeni. 

The municipality will utilize these legislative tools to license industries and ensure that they 
comply with the minimum emission standards, ensure facilities are reporting their emissions to 
the National Atmospheric Emission inventory, conduct health impact studies, and ensure that 

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the ambient air quality standards and dust control standards are not exceeded by conducting 
ambient air quality monitoring 

The act is in line with efforts to safeguard the constitutional right to an Environment that is not 
harmful to health and wellbeing. The station would be used to provide the benchmark for air 
quality management and governance. 

(ii) Health Education / Awareness Campaigns 

The unit also visited a number of school in a mission conduct awareness so as to impact 
knowledge to younger people and communities. A total of 80 schools were visited this year. 
Some of the issues dealt with during school visits includes: 

(iii) Personal Hygiene 

To promote health and prevent disease and disabilities by developing communities and 
systematic strategies to improve health knowledge, attitudes, skills and behaviour. 

(iv) Water Quality Preservation Awareness 

Environmental Health monitors the quality and availability of water intended for human 
consumption, as well as for recreational, commercial and industrial use. 

The EH unit monitors surface water for waterborne diseases such as cholera, typhoid, 
dysentery, polio and hepatitis through sampling of rivers, streams and sewerage purification 
plants. Drinking water sources are also monitored for their compliance with the legislated 
standards. 

Ensuring water safety in respect of safe quality (microbiological and chemical), and 
accessibility to an adequate quantity for domestic use as well as in respect of the quality of 
water for recreational, industrial, food production and any other human and animal use in order 
to prevent and eliminate water borne illnesses 

(v) Food Safety Awareness 

Ensuring that food is handled in a hygienic manner from a point of origin (i.e. during production, 
storage, processing, distribution and sale). All food should be safe, wholesome and fit for 
human consumption and should conform to the legislative requirements as they relate to 
safety, nutrition, quality and labelling (expired, use by and sell by). 


(vi) Communicable Disease Control 


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To prevent the occurrence and/or manifestation of environment-related or communicable 
diseases. This includes planning and execution of education and hygiene promotion 
programmes aimed at preventing environmentally induced diseases and related 
communicable diseases. Healthy lifestyles, personal hygiene as well as a safe and healthy 
environment are key to the prevention of diseases. 


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CHAPTER FOUR: ORGAN)S ATIONAL DEVELOPMENT PERFORMANCE 
(PERFOMANCE REPORT PART 2) 


4.1 INTRODUCTION AND OBJECTIVES OF THE DEPARTMENT 

The Department renders support service to other Business Units of the Municipality in 

order to effectively deliver services to the community through the following functions: 

• Support Services 

• Human Resources Management 

• Legal services 

• Security Services 

• ICT 

The agenda and programme of the Department of Corporate Services is informed by the 

following goals and objectives: 

a) To provide professional administrative support to Council and all 
Departments and their Business Units of the Municipality. 

b) To provide effective management and maintenance of the Municipality’s 
facilities and fleet. 

c) To position the Department as a strategic hub for acquiring the best human 
resources in the form of skills and talent, nurture and harness human 
development and growth, recognize and acknowledge excellent 
performance, empathize and support staff, and strive for retention of the 
workforce. 

d) To provide professional legal advice to line function Departments. 

e) To provide an innovative, effective and efficient Information and 
Communication Technology service that enables the achievement of the 
Municipality's objectives as set out in the IDP. 

f) To provide guidance and support to all Departments and their Business Unit 

with regards the acquisition, deployment and maintenance of electronic 
systems within the Municipality. 

g) To provide an effective security service in accordance with the prescribed 
Acts, By-laws and Regulations. 


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4.2 ACHIEVEMENTS AND CHALLENGES 


The achievements and challenges of the Department are presented herein according 
to the outcomes of the Corporate Services Department’s own mini strategic plan 
which recognized all 5 Units, i.e. HR, ICT, Support Services, Legal, and Security. 

4.2.1 ACHIEVEMENTS 

(a) Human Resources: 

• Filling of positions particularly the critical senior managers' positions, 
particularly the Municipal Manager and Senior Manager: Community Services. 

• The adoption by Council, of the reviewed Municipal Staff Establishment 
(Organogram)and the prioritization of posts which is done to comply with the 
austerity measures that are being implemented in the Municipality. 

• Maintenance of sound and peaceful Labour Relations. 

• Successful review and introduction of Policies which have been done through 
a participatory process. 

• Provision of meaningful and relevant Employee Assistance Programmes which 
include the organizing of dignified memorial services amongst others. 

• Successful training and development of employees and community particularly 
the unemployed Youth. 

• The implementation of Employee Performance Recognition Awards. 

• The maintenance of the implementation of the TASK Wage curve remuneration 
management system. 

• The conclusion of the writing of the Job descriptions and submission to the 
SALGA Job Evaluation Committee. 

• The successful maintenance and keeping up with the HR related compliance 
issues, i.e. timeous submission of Employment Equity Report, and the 
Workplace Skills Plan (WSP). 

• The promotion and maintenance of occupational safety through the Safety 
Committee, Safety Representatives, continuous site inspections, and repetitive 
training to employees, supervisors, and the Reps. 

(b) Information Communication Technology: 

(i) Providing savings of R300 000 per month in printing/ copying costs through 
the implementation of the office automation solution. 


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(ii) Improving internet bandwidth (speed) from 2mbps to lOmbps while 
maintaining cost from R18 400 to R18 800 per month. 

(iii) Introduction of digital tools of trade (tablets) to improve communication for 
Councillors and traditional leaders. 

(iv) Rapid response in resolving it problems (inclusion of job card system) 

(v) Full provision of staff ICT tools of trade to all those who needs them 

(vi) Full equipped ICT server room 

(vii) Established ICT governance structures (DGITOC - information technology 
officers council and ICT steering committee) 

(viii) Adoption of various ICT policies 

(ix) Minimize ICT audit queries which contributed to the municipal clean audit 

(c) Support Services: 

• Proper management of committees 

• Adoption of fleet management policy 

• Adoption of Vehicle Subsidy Policy 

• Increased the provision of the fleet (e.g. Water Tankers increase from 6 to 15) 

• Changed the alignment functions and perception that this Division had the 
responsibility of rendering only Committee Management function instead of Fleet, 
Records, Facilities Management 

• Improved physical set up of the Records Management System in order to comply 
with the Archives legislation 

• Electronic distribution of agendas for both management and Councilors 

(d) Health & Safety (Environmental Health) 

• Expansion of environmental health services as result of the devolution of this service 
from Provincial to Local Government in 2014. 

• The appointment of Pollution Officer 

• Installation of the Pollution dictation tool at Haysome Road close to Disaster 
Management Building 

• Constantly updated Council (reports to the portfolio committee) on the issues of 
Environmental Health within the District 

• Constant monitoring of water quality and reporting abnormalities timeously. 


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(e) Legal Services: 

• 100% success rate in dealing with objections/appeals against decisions of the Bid 
Adjudication Committee in their award of tenders. 

• Successfully defended all legal actions instituted against the Municipality. 

• Introduction of an Incident Register to monitor possible legal claims against the 
Municipality. 

• Dealt with the review of Service Level Agreements signed between the Municipality 
and Service Providers 

4.2.2 CHALLENGES 

(a) Human Resources: 

(i) Recruitment: 

• Uncomfortable staff turnover due to resignations, retirement, and deaths. 

• Difficulty in attracting and retaining skilled personnel due to the Task 
Remuneration system. 

• Compliance with the EEP not adequate. 

• Slow progress in the conclusion of the Job Evaluation exercise done by the 
SALGA Committee. 

(ii) Training: 

• Shortage of Training Venues 

• Limited budget for training 

• Non-compliance by Staff and Councilors with the skills questionnaire form 
which affect WSP 

• Shortage of vehicles to transport Councilors, staff, and external learners to 
training venues 

• Insufficient training of employees due to financial issues which affected the 
implementation of the WSP. 

(iii) Occupational Health & Safety 

• Limited budget to address issues identified through occupational and health 
risk assessment and safety plan. 

• Delay and poor response to report and investigate incidents and accidents. 

• Unpalatable working conditions: office space, and conditions of the buildings. 

• Occupational risk to employees working in the night shift. 


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(iv) Labour Relations: 

• Insufficient strategic engagement sessions outside the LLF between Shop 
Stewards and Management. 

• Historical unending disputes. 

• Flimsy disputes that take time and resources to respond to at SALGBC and 
CCMA. 

(v) EAP 

• Wellness programmes affected by Austerity Measures. 

• Insufficient support by Supervisors to EAP employees. 

• NJMPF & SALGA dispute on defined contribution vs defined benefit issue. 

• Non-registering of beneficiaries by employees. 

(vi) Information Communication Technology: 

• Poor attendance of ICT awareness sessions by departments 

• Acquisition of ICT systems by departments without involvement of the ICT unit 

• Lack of Management of SLAs for some ICT systems 

• Lack of budget for training of ICT staff 

• Expired ICT Master System Plan 

• Lack of the consolidated ICT municipal systems 

(vii) Support Services: 

• Disregard of the Fleet Management Policy by staff. 

• Not conducive office environment 

• Lack of accessibility of municipal offices by people that are specially enabled 
(Lift) 

• Lack of Office Space and parking 

• Ablution facilities that are over allocated 

• Constant breakdown of old air conditioning system 

• Lack of fleet mechanical workshop 

• Lack commitment by some of cleaning staff 

• Financial constrains to conduct renovation particularly satellite offices and 
Auditorium 

• Lack of a proper Council Chamber 


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(viii) Legal Services: 

• Any delay by other departments in alerting the Unit about litigations against the 
municipality places the municipality at risk; and 

• Lack of access to research tools compromises the work of the Unit. 

• Lack of staff capacity. 

4.3 THE MUNICIPAL PERSONNEL 

There has been a focus on building strong Municipal administrative systems and 
processes. It includes ensuring that administrative positions are filled with competent 
and committed people whose performance is closely monitored. Targeted and 
measurable training and capacity building will be provided for Councillors and Municipal 
Officials so that they are able to deal with the challenges of local governance as well 
as ensuring that scarce skills are addressed through bursary and training programmes. 

The basic requirements to be monitored include: 

(a) Ensuring that the top six posts (Municipal Manager, Finance, Technical Services, 
Corporate Services, and Community Services) are filled by competent and qualified 
persons. 

(b) That the Municipal staff establishment (organogram) is realistic, underpinned by 
service delivery model, and affordable. 

(c) That there are implementable human resources development and management 
programmes. 

(d) There are sustained platforms to engage organised labour to minimise disputes and 
disruptions. 

(e) Maintaining adequate levels of experience and institutional memory. 

4.4 THE STAFF STRUCTURE 

The amended / reviewed staff establishment of the Municipality was adopted and 
approved by Council on the 30 May 2017. The amendments / review of the staff 
establishment was done to make the Municipal Staff Establishment to be aligned with 
the strategic directive of the new Council’s term of office, i.e. 2016 - 2021. The 
amendment / review of the Staff Establishment resulted with the creation of new posts 
which added to the number of vacant posts in the Municipality. The new posts and the 
application of the Austerity measures, led to the vacancy rate being above the COGTA 
expected norm of 12%. The vacancy rate had, since the adoption of the staff on the 
30 May 2017, remained at 22% despite the prioritisation of posts. 


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The review of the IDP and the compilation of the 2018/2019 budget, provided an 
opportunity to make amendments to the Staff Establishment in order to be presented 
simultaneously with the IDP and Budget. The review intended to ensure that the 
Municipality’s human resources is aligned with the both the strategic guideline and 
finances. This is provided for and clearly prescribed in Chapter 2 of the Local 
Government: Municipal Planning and Performance Management Regulations. 
Section 2 (1) (a) with the heading: detail of integrated development plan, states the 
following: 

A municipality's integrated development plan must at least 
identify, the institutional framework which must include an 
organogram. 

The reviewed staff establishment was presented to the Special Council meeting held 
on the 28 June 2018, and the following was resolved: 

1) adopt the reviewed Staff establishment according to the prioritized 
posts in order to ensure alignment with the affordability of the new 
financial year budget2018/2019. 

2) approve the list of the prioritised posts that would be filled in the 
2018/2019 financial, in accordance with the budget affordability 
of the Municipality. 

3) conduct recruitment in the 2018/2019 financial year according to 
the prioritized posts, with emphasis on service delivery related 
posts. 

4) ensure that the recruitment is compliant and adhere to legislation 
and Regulations particularly the Employment Equity Plan. 

5) to subject all Municipal posts to a highly scientific need analysis that would be done 
by an independent professional institution 


The table summary of the staff establishment of the Municipality as approved by the Special 
Council on the 28 June 2018 is as follows: 


ESTABLISHME 

NT 

NUMBER 
OF POST 

STAFF 

COMPLEMENT 

UNBUDGETED 

POSTS 

SHARED 

SERVICE 

! VACANCIES 

I 

% VACANT 

TOTAL POSTS 

L -- 

732 

568 

74 

3 

94 

13.3% 


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Tum^over-Rate 

Details 

Total Appointments as of the 
Beginning of Financial Year 

Terminations during 
the Financial Year 

. •— 

Turn-over-rate 

<%} 


No. 

No. 


2012/2013 

456 

44 

9.64% 

2013/2014 

559 

35 

6.26% 

2014/2015 

553 

3 

0.54% 

2015/2016 

577 

15 

2.60% 

2016/2017 

582 

43 

7.38% 

2017/2018 

561 

29 

5.61% 

2018/2019 

567 

28 

4.93% 


The approved staff establishment indicate that the Municipality has a total of 732 approved 
posts, 568 posts are filled, 74 posts are frozen, and 94 posts are prioritized as vacant. The 
vacancy rate has decreased from 23% to 13.3%. The reduced vacancy rate figure is somehow 
affected by the frequency of terminations which is due to resignations, retirements, and 
sometimes death. 


4,5 EMPLOYEE TOTALS, TURNOVER AND VACANCIES 


Tum-over-Rate 

Details 

Total Appointments as of the 
Beginning of Financiai Year 

j 

No. 

Terminations during 

the Financial Year 

No. 

Turn-over-rate 

(%) 

. - 

2011/2012 

103 

30 

29% 

2012/2013 

110 

30 

■ —l 

27% 

2013/2014 

23 

32 

139% 

2014/2015 

54 

20 

37% 

2015/2016 

16 

19 

118% 

2016/2017 

16 

34 

213% 

2017/2018 

27 

19 

70% 

2018/2019 

12 

15 

125% 


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Terminations is deemed fair if is it in line with Section 188 of the Labour Relations Act which state 
that termination should be based on operational requirements, ill-health, and conduct. The 
terminations from the Municipality caused a concern from both the Management and organised 
labour. The monthly report on staff movements includes update information on terminations. The 
report as cited, also includes a summary of issues raised on exit interviews. 

(a) Findings From Exit Interviews 

Employees who voluntarily leave employment with I DM, are always encouraged to take part in 
a confidential exit interview. The interview is held either with a member of the Human Resources 
Unit, or with their respective superior. Records and figures of the employees leaving, and their 
reasons are monitored and reported on a monthly basis. A total of 15 employees have voluntary 
left IDM. Their reasons as collected from the data in their exit interview files, vary and include 
the following: 

1) leaving IDM voluntarily because of a lack of advancement and a better 
opportunity in another institution; 

2) salary improvement (the Task Age Curve seem to be not attractive for 
retention, particularly to the employees who are Personal-To-Ho/der); 

3) commuting problems and family challenges; and 

4 ) a minority of employees cited the relationship with their immediate 
supervisors and lack of challenge in the work performed, as contributing to 
their decision to leave IDM. 

Overall however, the attitudes of most people leaving IDM were positive towards the 
Municipality. Issues of a friendly organisational culture, relationships with colleagues, and 
Managers, work/life balance, and job security were rated highly by the leaving employees. 

6.6 MANAGING THE MUNICIPAL WORKFORCE 

The policies listed below together with all relevant legislation, the Collective 
Agreements as agreed upon at the South African Local Government Bargaining 
Council (SALGBC), and the various Regulations that are provided by COGTA, are used 
to ensure proper management and governance in the Municipality. The Policies as 
listed below continuously get reviewed on the continual basis in order to ensure their 
relevance and compliance with the developments and amendments to legislations and 
regulations. Both the legislation and Policies are used in the management of the 
municipal workforce. 


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Further, the successful delivery of services is dependent on the staff that strictly adhere 
to the Batho-Pele Principles, and the Back-to-Basics Programme. The strict adherence 
to legislation, Policies, Batho-Pele Principles, and the Back-to-Basics Programme 
means that ALL Municipal staff should be competent, professional, impartial, sensitive, 
compassionate, dedicated, and committed. The achievement of the noble ideal for the 
successful delivery of services requires that the Municipality’s collective actions adhere 
to the following: 

a) the development and maintenance of a sustainable Staff Establishment that is 
geared and designed for effective and efficient service delivery, 

b) the fair recruitment process that is focused on the merit requirements that are 
consistent with the task to be performed for the improvement of the quality of lives 
(compliance with relevant legislative framework: EEA etc.), 

c) the up-skilling and development of staff that is based on both the individual 
willingness to improve his/her skills and qualifications, as well as the Municipality 
that provides a conducive environment for individual, group, and institutional 
development and growth (budget and training facilities within the available financial 
means), 

d) the up-skilling and development of Councillors that is based on both the individual 
willingness to improve his/her skills and qualifications, as well as the Municipality 
that provides a conducive environment in order for the Councillors to be able to 
progress beyond the political domain, 

e) the development and empowerment of the community served by the Municipality 
through meaningful internships and learnerships that contribute to the skills 
development of the District, Province and the country at large (Youth given more 
priority), 

f) maintenance of sound and stable labour relations through LLF and quarterly 
bilateral engagements, 

g) the continued support of staff through the EAP activities that promote wellness in 
order to effectively contribute to service delivery, 

h) improving performance for effective service delivery through the cascading of the 
Performance Measurement System (consideration of the financial impact in the 
light of the current circumstances), 

i) the reinforcement and strengthening of the conducive work environment through 
adherence and compliance with the legislative framework on Occupational Health 
& Safety (starting point being the urgent appointment of the OH&S Officer), 


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j) serious consideration and implementation of the skills attraction and retention 
approach, system, and mechanism. 


4.7 POLICIES 


HR Policies and Plans 

No. 

Name of Policy 

. 

Completed 

% 

- 

Reviewed 

% 

Date adopted by council 

or comment on failure to 

adept 

1 

Employment Equity and Affirmative 

Action 

....... 

100 % 

100 % 

The Municipality 

Employment Equity Plan 

addresses Affirmative 

Action issues. 

2 

Attraction and Retention 

100 % 

100 % 

Adopted by Council on 

the 28 June 2018. 

3 

Code of Conduct for employees 

N/A 

N/A 

Compliance with 

Schedule 2 of the MSA, 

and Annexure A of the 

SALGBC Collective 

Agreement 

4 

Delegations, Authorization & 

Responsibility 

100 % 

100 % 

Guided by the legislative 

framework, and the 

adopted Municipal Policy 

5 

Disciplinary Code and Procedures 

100 % 

100 % 

SALGBC Collective 

Agreement 

6 

Essential Services 

100 % 

100 % 

Adopted by Council on 

the 28 June 2018. 

7 

Employee Wellness Programme 

100 % 

N/A 

Policy was developed 

and finalized in June 

2015. 

9 

Exit Management 

100 % 

100 % 

Covered in the Retention 

Policy 

10 

Grievance Procedures 

N/A 

N/A 

Guided by the legislative 

framework, i.e. MSA. 

11 

HIV/AIDS 

100 % 

N/A 

Policy was developed 

and finalized in June 

2015. 


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12 

Human Resource Development 

Strategy 

100% 

100% 

Adopted by Council on ' 

the 28 June 2018. 

1 

13 

Information Technology 

100% 

100% 

June 2016 

14 

Job Evaluation 

100% 

100% 

All Job descriptions 

submitted to the SALGA 

JE Committee 

15 

Leave Management 

100% 

100% 

Policy was developed 

and finalized in June 

2015. The aspect of leave 

encashment has been 

reviewed 2016/2017. 

16 

Occupational Health and Safety 

100% 

100% 

Adopted by Council on 

the 28 June 2018. 

17 

Official Housing 

N/A 

N/A 

Covered by the SALGBC: 

Collective Agreement 

18 

Official Journeys 

N/A 

N/A 

Covered by the Municipal 

Subsistence and Travel 

Allowance Policy 

19 

Official transport to attend Funerals 

N/A 

N/A 

Covered in the 

Bereavement Policy to be 

finalized 

20 

Official Working Hours and Overtime 

100% 

1 

100% 

Guided by the legislative 

framework, i.e. LRA and 

the Municipal Policy. 

21 

Organizational Rights 

N/A 

! 

! 

N/A 

Guided by the legislative 

framework LRA, and the 

SALGBC: Collective 

Agreement 

22 

! Payroll Deductions 

N/A 

N/A 

Legislated 

23 

Organizational Performance 

Management and Development 

100% 

| 100% 

Reviewed in the financial 

year 2016/2017 

24 

Recruitment, Selection and 

Appointments 

100% 


Reviewed in 2016/2017 

25 

Remuneration Scales and 

Allowances 

N/A 

1 _ 

N/A 

Decided through the 

SALGBC: Collective 

Agreement and COGTA 


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Regulations for 

Councilors, MM, and Snr 

Managers. 

26 

Resettlement 

N/A 

N/A 

Covered in the 

Recruitment and 

Selection Policy 

27 

Sexual Harassment 

100 % 

N/A 

Work-in-progress 

28 

Skills Development 

100 % 

100 % 

Reviewed and adopted 
annually with the WSP. 

29 

Smoking 

N/A 

N/A 

Covered in OHS Policy 

30 

Special Skills 

N/A 

N/A 

Still to be developed 

31 

Work Organisation 

N/A 

N/A 

Still to be developed 

32 

Uniforms and Protective Clothing 

100 % 

100 % 

To be reviewed together 

with the OH&S Policy. 

33 

Other: 

- 


- 


4.7.1 POLICIES UNDER REVIEW AND BEING INTRODUCED 

Policy development, monitoring and assessment is a continuous process that 
institutions or organisations must undertake periodically. The review of HR policies 
is one of the key performance areas for Corporate Services as contained in the 
SDBIP. The HR Division has developed four (4) Draft Policies that have to be reviewed 
in the current financial year 2018/2019. The review of the Draft Policies will be 
undertaken to ensure that the Municipality's policies are adapted to reflect changes that 
are effected by developments in legislation, collective bargaining agreements, and 
Council’s resolutions, as well as the community and the employees’ views. The HR Unit 
has identified the policies to be reviewed and making research so that the first draft 
Policies be presented to MANCO, LPA, LLP, and Council before being taken out for 
consultation with all employees. 

4.8 LEAVE MANAGEMENT 

The leave management within the Municipality is implemented in accordance with the 
prescripts of the SALGBC: Main Collective Agreement, Leave Management Policy of 
the Municipality, and applicable legislations. The leave system has the following 


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categories: annual leave, sick leave, family responsibility leave, maternity leave, study 
leave, and special leave. 


LEAVE MANAGEMENT 

Details 

Annual 

Sick leave 

Family Res. Leave 

Maternity Leave 

r 

Special leave 

2017/2018 

10388 

3913 

249 

482 

106 

2018/2019 

_ 1 

10994 

3634 

322 

■ 

1 

280 

57 


a) Annual leave 

Each employee is entitled to twenty-four (24) days annual. The collective agreement 
and policy stipulates that employees are compelled to take sixteen (16) leave days and 
can only retain a maximum of forty eight (48) days as accrued leave. The annual leave 
is only type of leave that accrues and it has a huge financial impact to the Municipality, 
if not utilised accordingly. There has been an increase in a number of people who 
accrue their leave, particularly towards pension or resignation. Follow up letters have 
been written to the employees to encourage them to take the annual leave in adherence 
with the Main Collective Agreement and Leave Management Policy. 

b) Sick leave 

Each employee is entitled to 80 days sick leave in a period of a three year cycle. 
While the abuse of the sick leave has improved significantly, there is a serious 
concern regarding employees who have either exhausted or utilized more than 
(60%) of their sick leave. In simple terms they have less than thirty (30) even zero 
sick leave balances. Letters have been written to the affected employees advising 
them regarding their sick leave days balances. Supervisors have been alerted and 
requested to conduct assessments in respect of these employees as they might 
require other appropriate interventions, i.e. employees’ assistance programs and 
assessment for potential medical boarding. 

c) Family responsibility 

The family responsibility leave is guided by the Collective Agreement. An 
employee is entitled to a non-accumulative 5 days annually. 

d) Maternity leave 

Female employees are entitled to receive three (3) months paid maternity 
leave per confinement, with no limit to the number of confinements, provided 

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that an employee has one (1) year service with the Municipality. Whilst doing 
leave audit, it was found that some employees do not apply for maternity leave, 
four (4) weeks prior of taking such leave, in terms Section 25 (2) (b) of Basic 
Conditions Employment Act 75 of 1997 as amended. The matter was addressed 
accordingly after it had been brought to the attention by an internal Auditor’s 
query. The Policy will be reviewed to improve control mechanism. 


e) Special leave 

Special leave on full pay is granted to an employee In accordance with 
the SALGBC Collective Agreement of the KZN Division, and Leave 
Management Policy. The special leave is done under the following 
instances: 

i. Court appearances by employee as witness; 

ii. Study purposes; 

iii. National and provincial sports representation. 

iv. The application for this leave must be accompanied by documentation that 
supports the application. 

v. The leave is limited to a maximum of 10 days per annual cycle. 


The study leave is the most prevalent leave under special leave, since more 
Municipal employees have joined the Municipal Assisted Education Scheme in 
terms of applicable policy. Employees are given 2 days leave to prepare and write 
exams. 


4.9 OCCUPATIONAL HEALTH AND SAFETY INCLUDING INJURIES 

The Municipality has always maintained a remarkable low record of fatalities and/or 
serious injuries on duty. The EAP roadshows, appointment of professional OH&S 
Officer, and the election of Occupational Health and Safety Representatives in each 
Department has also significantly contributed to the wellbeing of employees of the 
Municipality and a low level of injuries. 


The Occupational Health and Safety function which was initially under the 
Environmental Unit, was relocated to the Human Resources Unit. The incumbent who 
performed the duties thereof then, was transferred to the position laterally to the then 
existing vacant position of Senior Pollution Control Officer. This rearrangement 
effectively made the position of Officer: Occupational Health and Safety vacant. The 

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recruitment processes for the position ensued and the suitable candidate resumed 
duties on the 15 May 2017. The first directive to the appointed Officer: Occupational 
Health and Safety was that of providing a clear analysis of the Municipality's in relation 
to situation occupational health and safety. 

The Officer: Occupational Health and Safety (accompanied by a colleague), makes 
regular visits to the workplaces of the Municipality in order to provide an informed 
situational analysis. The workplace site visits involves a brief discussion with some 
employees and Supervisors at depots, and also a meeting with the Health and Safety 
Representatives, and representatives of trade unions. The visits also briefly went to 
some remote plant workplaces, and also some areas where there is construction in 
order to assess the plant and perimeter, construction work and interview the 
employees and operators. 

4.10 DISCIPLINE, AND SUSPENSIONS 

The conclusion and signing of the Disciplinary Procedure Collective Agreement at 
the SALGBC, has brought adequate regulation and management of discipline 
within the Local Government sector. IDM complies with Collective Agreement in the 
application of discipline, and strictly adhere to the principles of natural justice. A 
total of thirty four cases have been undertaken in the Municipality and their status 
is presented in the table below: 


NATURE OF 

SANCTION /STATUS 

NUMBER OF EMPLOYEES 

CHARGES 


. '.. - 

Gross Misconduct 

Acquitted 

2 

Gross Misconduct 

Warning 

3 

Gross Misconduct 

Final warning 

14 

Gross Misconduct 

Suspended 

1 

Gross Misconduct 

Dismissal 

3 

Gross Misconduct 

Ongoing cases 

11 


4.11 CAPACITATING THE MUNICIPAL WORKFORCE 
(a) WORKFORCE CAPACITY DEVELOPMENT 

The Municipality remain committed to the development of internal and external capacity 
by providing various skills development intervention aimed at improving the 
performance of individual employees, Councillors and providing skills to unemployed 

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youth within the district. The HRD Committee, ensures that the Workplace Skills Plan 
(WSP) which is aligned to the Municipality’s strategic objectives, is developed annually 
in line with the Skills Development Act and Local Government Sector Education and 
Training Authority (LGSETA) guidelines. Funding to implement learning programmes 
is provided by the Municipality or sourced from the LGSETA. 


The Workplace Skills Plan focused on the following learning programmes: 


LEARNING PROGRAMMES 

NUMBER OF BENEFICIARIES 

Water Wastewater Treatment 

12 

Occupational Health and Safety 

19 

Project Management 

03 

Various formal studies 

23 

Councillor Development 

26 

Supervisory Skills Programme 

07 

COMPUTER LITERACY 

16 


4.12 LABOUR RELATIONS 

The basic HR/labour responsibilities that the Municipality must deal with relate to 
ensuring the balance between management and employees, dealing with disputes, and 
maintaining good relations with the Trade Unions. All the issues as listed were perform 
adequately, save that there were issues of serious concern that almost crippled the 
Municipality. The issues relate to the following: working conditions, disputes, conduct 
and behaviour, engagements, and distressing/saddening personal matters relating to 
individual employees. 

4.13 IGR: CORPORATE SERVICES FORUM 

The IGR Corporate Services Forum came into being during 2016/2017 financial year. 
The Forum consist of all the Directors of Corporate Services and the HR Managers 
from the family of Municipalities under IDM. The Forum meet consistently and submit 
its work and reports to the Municipal Managers Forum who in turn endorse and/or 
elevate issues raised by the IGR Corporate Services Forum. The forum has among 
other things, succeeded to ensure that Municipalities share and empower one another 
on issues relating to Policies, Job Evaluation, compliance with all relevant legislation 
and Regulations, particularly relating to HR, and above all strategies to maintain 
workplace peace in Municipalities within the District. 


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4.14 MANAGING WORKFORCE EXPENDITURE 

Total Employees costs for the financial year under review amounted to R134 335 596 
million against the budget of R90.7m. This represents 99% spending on salaries 
budget. The variance is attributed to savings amongst others. Overall, the employee 
costs represent 27% of total operational expenditure which is well within the 35% 
threshold as per National Treasury guidelines. 

4.14.1 WORKFORCE EXPENDITURE 

(a) REMUNERATION PACKAGES OF THE MUNICIPAL MANAGER AND 
MANAGERS DIRECTLY ACCOUNTABLE TO THE MUNICIPAL MANAGER 

The Municipality complies with the Government Gazette No 41173 of 10 October 2017: 
Notice 1092 as issued by National Minister of COGTA, i.e. Local Government 
Remuneration Framework for the Remuneration Packages Payable to Municipal 
Managers and Managers directly accountable to Municipal Managers. The current total 
remuneration package of the Municipal Manager and the Managers reporting to the 
Municipal Manager is therefore structured as follows: 


i Designation of senior manager 

Actual remuneration 


Total salary package 

in terms of 2017 

Notice 

Total salary package in terms of 

2017 Notice 

MUNICIPAL MANAGER 

R1 071 375.00 

R1 071 375.00, R1 245 786.00, 

R1 420 196.00 

SENIOR MANAGER: 

TECHNICAL SERVICES 

R1 2 78241 

R884 770.00, R1 022 855.00, R1 

160 941.00 

SENIOR MANAGER: 

COMMUNITY SERVICES 

R884 770.00 

R884 770.00, R1 022 855.00, R1 

160 941.00 

CHIEF FINANCIAL OFFICER 

R1 022 855.00 

R884 770.00, R1 022 855.00, R1 

160 941.00 

SENIOR MANAGER: 

CORPORATE SERVICES 

R1 232 157 

R884 770.00, R1 022 855.00, R1 

160 941.00 


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CHAPTER 5: FINANCIAL HEALTH OVERVIEW 


5.1 INTRODUCTION 

The purpose of this report is to provide information that would be useful to users of 
the annual financial statements for accountability and decision making purposes by 
enabling them to gain an insight into the operations of the iLembe District Municipality 
from the perspective of the municipality. It also provides the opportunity to reflect on 
the municipality’s interpretation of significant items, transactions and events affecting 
the financial position, financial performance and cash flows of the municipality. 
Therefore, this financial statement discussion and analysis complements the 
information in the 2018/19 Audited Annual Financial Statements. This financial 
statement discussion and analysis report is consistent with the 2018/19 Annual 
Financial Statements and the underlying items, transactions and events, as well as 
assumptions such as those relating to recognition and measurement. The following is 
included in this report: 

(a) An overview of the iLembe District Municipality’s operations and the environment in which 
it operates; 

(b) Information about the iLembe District Municipality’s objectives and strategies; 

(c) An analysis of the iLembe District Municipality's financial statements including significant 
changes and trends in its financial position, financial performance and cash flows; and 

(d) A description of the iLembe District Municipality’s principal risks and uncertainties that 
affect its financial position, financial performance and cash flows, an explanation of 
changes in those risks and uncertainties since the last reporting date and its strategies for 
bearing or mitigating those risks and uncertainties. 

5.2 GOVERNANCE: LEGISLATIVE/REGULATORY STRUCTURE AND 
MANAGEMENT STRUCTURE 

The compilation of the Annual Financial Statements is governed by the regulatory 
requirements that are prescribed by firstly the South African Standards of Generally 
Recognized Accounting Practice (SA Standards of GRAP), requirements of the 
Municipal Finance Management Act of South Africa, 2003 (Act No.56 of 2003) (MFMA) 
and the Division of Revenue Act of South Africa, 2018 (Act No.3 of 2017) (DoRA). The 
Accounting Officer (“Municipal Manager”) is responsible for the preparation and fair 
presentation of the financial statements in accordance with SA Standards of GRAP and 

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the requirements of the MFMA and the DoRA, and for such internal controls as the 
Accounting Officer determines is necessary to enable the preparation of financial 
statements that are free from material misstatement, whether due to fraud or error. 

In terms of the MFMA System of Delegations as adopted by the Municipal Council of 
the iLembe District Municipality the Chief Financial Officer (CFO) is directly responsible 
for the preparation and fair presentation of the financial statements and for the internal 
controls that are necessary to enable the preparation of financial statements that are 
free from material misstatement. Hence the CFO is required to undertake and manage 
all relevant work outputs to achieve the final preparations and submission to the 
Accounting Officer to meet the prescribed time frames. 

iLembe District Municipality has established a Budget and Treasury Office (Finance 
Department) i.e. the office of the Chief Financial Officer in terms of section 80 of the 
MFMA. The finance department is headed by Mr M Chandula! as Chief Financial 
Officer. The department is mainly responsible for the overall direction, monitoring and 
management of the finances of the municipality and for such roles as defined by 
sections 81 and 79 of the MFMA. The Management Structure of the Budget & Treasury 
Office for which Chief Financial Officer is the administrative head is documented as 
follows: 

(i) Budget and Compliance Monitoring 

This unit is headed by Manager Budget & Compliance, Mr. S Chonguene. The unit 
head is responsible for coordinating the budget preparation, implementation and 
monitoring processes, internal and external financial reporting and compliance 
monitoring in terms of sections 68 to 75 of the MFMA. This unit has three (3) sections 
i.e. Budget and Reporting, Municipal Standard Chart of Accounts Project Office and 
Annual Financial Statements and compliance monitoring. 

(ii) Revenue Management 

This unit is headed by Manager: Revenue; Mr M Gumede and is delegated the 
functions and responsibilities for the management of the revenue of the municipality 
in terms of section 64 of the MFMA. This unit has three (3) sections i.e. Revenue 
management, Credit control and collections, and Accounts administration and 
customer care. 


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(iii) Supply Chain Management 

This unit is headed by Manager: Supply Chain Management; Mr N Xulu and is 
delegated the functions and responsibilities for Supply Chain Management in terms of 
chapter 11 of the MFMA. This unit has three (3) sections i.e. Demand and Acquisition 
Management, Contract Management and Logistics Management in terms of regulation 
39 of the MFMA SCM regulations. 

(iv) Expenditure Management 

This unit is headed by Manager: Expenditure; Mr T Shezi and is delegated the 
functions and responsibilities for expenditure management in terms of sections 65 and 
66, Cash management and investments in terms of section 13, municipal debt 
management in terms of chapter 6 and municipal bank accounts in terms of chapter 3 
part 2 of the MFMA. 

(v) Assets Management 

This unit is headed by Manager: Assets Management; Mr EN Ngcobo and is 
delegated the functions and responsibilities for asset management in terms of 
section 63 and capital assets disposal in terms of section 14 of the MFMA. 

5.3 iLEMBE DISTRICT MUNICIPALITY'S RELATIONSHIP WITH OTHER ENTITIES 
THAT COULD AFFECT ITS FINANCIAL POSITION, FINANCIAL PERFORMANCE 
AND CASH FLOWS 

iLembe District Municipality has the following relationship with the following 
entities: 

• A wholly owned entity with net assets of R20 million - ILembe Management 
Development Enterprise (Pty) Ltd; 

• R30 million long-term loan with ABSA Bank bearing an interest rate of 10.8% 
per annum, interest is paid quarterly and the loan is repayable in May 2020; 

• R 44 772 380 long-term loan with Development Bank of South Africa bearing 
interest rates between 9.02% and 11.04% per annum payable every six months 
with the last repayment due on 30 September 2025; and 

• R27 million investment with ABSA, this investment has been ceded as security 
against the long term loan from ABSA. 

• Initially from iLembe District point of view, R16 million receivable from non¬ 
exchange transaction was owed to the municipality by other organs of the state 

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for infrastructure projects (Department of Co-operative Governance & 
Traditional Affairs. However, this matter was raised as an audit finding, where 
it was concluded that the nature of the transaction cannot be classified as a 
trade receivable, and has been recognised in the 2018/2019 AFS at nil balance 
(both current and comparative firgures) 

• R150 million Bulk Water purchases mainly from Umgeni Water. 

• R119 million contracted services for various service delivery functions, and 
R144 million for the group. 

• R114 million outstanding consumer debtors of which 87% is attributable to 
households. 

• R170 million trade payables and accruals, the majority of which is attributable 
to infrastructure projects, vehicle leases and bulk water. 

5.4 EXTERNAL TRENDS, EVENTS AND DEVELOPMENTS IN LEGAL, 
REGULATORY, SOCIAL, POLITICAL AND MACRO-ECONOMIC ENVIRONMENT 
THAT IS SPECIFIC TO THE ILEMBE DISTRICT MUNICIPALITY WHICH HAVE OR 
MAY HAVE A SIGNIFICANT IMPACT ON ITS FINANCIAL POSITION, FINANCIAL 
PERFORMANCE AND CASHFLOWS. 

The aforementioned comprise of the following, namely: 

(i) Water Distribution Losses 

iLembe District Municipality has incurred water distribution losses of approximately 
62%. This is mainly due to illegal connections, main leaks (ageing infrastructure), 
reservoir overflows and service connection leaks. A five-year strategic master plan for 
the reduction of non-revenue water has been adopted by the municipality to address 
this problem. 

The following immediate actions are also underway in order to deal with the challenge: 

• Formulation of a preventative infrastructure maintenance plan and sourcing of 
funding for implementation - The maintenance plan completed. 

• Conversion of prepaid as they discovered to be malfunctioning which includes full 
meter audit to identify and deal with illegal connections and service connection 
leaks - this currently underway and ongoing. 

• Zoning and installation of control meters to control and monitor water distribution 
and completeness of revenue. 


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• Removal of stand pipes water connections and reduction of supply of water through 
water tanker system. 

• Non- revenue loss management through the appointment of a service provider to 
implement the above, manage telemetry and contain reservoir over flows. 

• Interventions through the Vuthela LED project to assist with a pilot project in 
Sundumbili at Mandeni Local Municipality 

(ii) Low Debt And Revenue Collection Rate 

Low debt and revenue collection is a legacy issue that the municipality inherited and 
is currently dealing with. The effect of this is an extreme strain in the cash flows of 
the municipality, high dependence on grant funding and low liquidity ratio. The 
annual municipal budget is mainly reliant on the forecasted revenue collection that 
will fund the expenditure throughout the financial year. When the projected collection 
rate is not achieved with no corresponding decrease in expenditure, it results in the 
implementation of a budget that is not cash backed. Fortunately the Municipality has 
presented a balanced and funded budget for the 2018-2019 year and the 2019-2020 
financial years. The collection rate for the 2018.2019 financial year is 64% as at 30 
June 2019. 

The following are some of the main challenges affecting the debt and revenue 
collection of the municipality: 

a. Significant number of unregistered indigent consumers 

A comparison of indigent consumer registers between the ILembe family of 
municipalities revealed that approximately 17 000 indigent consumers already 
registered with the local municipalities have not yet registered with the District 
Municipality. The implication of this is that there are currently consumers in the 
municipality’s database that are billed at the rate that they cannot afford and 
subsequently will not be able to service their debt. This will result in steady 
increase in the municipal debt book with no corresponding increase in receipts 
from debtors. 

When the qualifying consumers are eventually registered as indigents, this will 
result in the increase in debt impairment and write-offs and going forward will 
result in a decrease in revenue. An indigent outreach program has been drafted 
and being implemented by the municipality in order to address this issue. 

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Furthermore the indigent policies of the family of municipalities within the district 
are being aligned through the IGR structures to facilitate sharing of the registers 
within the district. In addition the Vuthela LED program has appointed a service 
provider to harmonise the indigent registers of all the Local Municipalities with 
the District. 

b. Deceased consumers not declared as such by the property beneficiaries 

The District Municipality have been confirmed as deceased by the Department 
of Home Affairs. In light of the aforementioned the property beneficiaries are to 
register for municipal services as beneficiaries. 

Due to the high number of indigents in the district, most deceased consumers 
do not have a deceased estate where the municipality can recover the debt 
from. A significant increase in this category of consumers also results in a 
significant decrease in revenue collection rate which also affects cash flows 
adversely. The municipality has currently embarked on the programme of 
notifying the property beneficiaries and/or the water consumers residing on the 
property of the deceased to register for services and enter into an AOD to pay 
off the debt accumulated after date of death of the previous consumer. An 
exercise to identify these consumers to open consumer accounts in the name 
of the current occupier. The old debt relating to these properties may then be 
considered for possible write off. Failure by the current consumers to register 
for services will result in services being terminated at the property of the 
deceased. 

c. Consumers categorised as pensioners 

A significant increase in this category of consumers has also contributed in a 
significant decrease in revenue collection rate which also affects cash flows 
adversely. 

(iii) Material sewer revenue losses 

The municipality uses the valuation system as a basis for determining sewer 
charges. With some of the houses with no values and some with low values. 

(iv) Predominantly rural communities with high unemployment rate and child headed 
families 


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A significant area of the iLembe District is situated in rural communities where most 
consumers cannot afford to pay for services. Some families are child headed and with 
the high unemployment rate this has contributed to the increase in the indigent 
consumers. The increase in indigent consumers without a corresponding increase in 
equitable share grant exerts a significant strain on the municipality’s cash flows as the 
municipality is currently dependent on grant funding. 

5.5 MAIN OPERATIONS INCLUDING SERVICE DELIVERY METHODS AND 
SIGNIFICANT CHANGES 

The iLembe District Municipality is mainly a Water Services Authority and Provider i.e. 
WSA and WSP. The main operations are the provision of water and sewerage services. 
Approximately 76% of the Municipal Service Charges revenue comes from water billing 
and 24% is for provision of sewerage services. The revenue collection rate was 64% 
for 2018/19 financial year, and was below the set target of 75%. 

5.6 FINANCIAL VIABILITY OBJECTIVES AND STRATEGIES 

The following are the financial viability objectives of iLembe District Municipality as 
reflected in the IDP: 

(i) To ensure sound revenue management principles 

(ii) To ensure sound expenditure management principles 

(iii) To ensure sound budgeting and compliance principles 

(iv) To procure quality goods and services in a cost effective, transparent, 
competitive, equitable and efficient manner within the policy framework 

(v) To ensure sound and effective asset and inventory management principles 

(vi) To implement and maintain compliant, effective and efficient enterprise risk 
management systems and processes. 

(vii) To ensure sound and credible general financial management principles 
(viii) To achieve a clean audit opinion; 

All of the above mentioned objectives relate to the financial position, financial 
performance and cash flows of the municipality. Each objective has a strategy in 
place and can be grouped into the different units within the finance department 
management structure. The achievement of these objectives and progress thereof is 
monitored through the monthly PMS reports and quarterly performance assessment 
sessions. 


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For the purpose of this discussion document, these objectives and strategies are 
grouped and explained below under each unit within the finance department 
management structure. 

5.6.1 REVENUE MANAGEMENT 

Revenue management is the life blood of the municipality. One objective fall under this unit i.e. 
to ensure sound revenue management principles. This above-mentioned objective relate to 
the financial position, financial performance and cash flows of the municipality. It is important 
to ensure sustainability of the municipality. Revenue collection for the period ended 30 June 
2018/19 was 64% compared to 69% achieved in the 2017/18. One of the major contributors to 
a decline in revenue collection rate is the increase in the amount being billed on a monthly 
basis due to increase in reading areas not previously read an the conversion of prepaid meters 
to conventional metering. The implementation of restrictions/disconnections of arrear debtors 
together with the assistance of a debt collector will see arrest of the high arrear debtor’s 
position. The profiling of debtors has also commenced and debtors marked for impairment will 
be considered for write off subject to scrutiny before such action is implemented. There is a 
revenue enhancement strategy that is currently being implemented by the municipality. 

Critical path and actions are as follows: 

a) Zoning and installation of control meters - Project underway; 

b) Debt collection strategy - Currently being implemented and closely monitored; 

c) Conversion of prepaid meters which are faulty to conventional metering. - Currently 
being implemented; 

d) Integration of the customer care, meter reading project, indigent management, credit 
control and debt collection processes for impact and monitoring of results - project 
underway. 

e) Change in meter reading method from manual to electronic with capability to GPS 
meters, take photos of meters and down load readings in to the billing system. 

5.6.2 SUPPLY CHAIN MANAGEMENT 

One objective falls under this unit i.e. to procure quality goods and services in a cost 
effective, transparent, competitive, equitable and efficient manner within policy 
framework. 


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The municipality is implementing the annual procurement plan to ensure proactive 
planning of the procurement process taking into account the project implementation 
dates or time frames. This assists in ensuring timeous finalisation of the procurement 
processes to ensure service delivery, adequate capital spending and elimination of 
SCM Audit findings. 

The municipality is trying to address the finalisation of competitive bidding processes 
within 90 days, however it remains a challenge due to factors beyond control. The 
municipality no longer relies on the use of external consultants to conduct the technical 
assessment of bids and now uses the in-house capacity within the Technical Services 
Department. 

The contract management section is functional and the municipality recently received 
assistance from KZN Provincial Treasury in rolling out the contract management 
function throughout the council. Training was provided to officials to ensure effective 
contract management processes are adhered to. 

With effect from 18 April 2017 prospective bidders can submit SARS unique pin 
whenever bidding for council projects. As from the 1 st July 2017 the municipality was 
required to engage entities registered on the Treasuries Central Suppliers Database 
(CSD). As we speak all the municipality's procurement activities are linked to the CSD. 

5.6.3 ASSETS MANAGEMENT 

One objective falls under this unit i.e. to ensure sound and effective asset management 
principles. The sustainability of IDM is highly dependent on the condition and 
performance of the infrastructure assets. Should any of the major assets collapse and 
not operate, the municipality will not be able to achieve its mandate. 

5.6.4 EXPENDITURE, LIABILITY, WORKING CAPITAL AND CASH FLOW 
MANAGEMENT 

Two objectives fall under this unit i.e. to ensure sound expenditure management 
principles and to ensure sound and credible general financial management principles. 
In terms of section 152 (2) of the Constitution of South Africa, a municipality must strive, 
within its financial and administrative capacity, to achieve the objects set out in 
subsection (1). The requirement for increased financial viability is very important in 

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order for iLembe District Municipality to fulfil its constitutional mandate as outlined 
above. Without financial viability, the municipality cannot fulfil its objectives and its 
vision to provide excellent services and quality of life for its people. 


The following strategies continued to be implemented during 2018/19 financial year in 
an attempt to overcome the challenge of over expenditure: 

a) Budget availability is cleared before commencement of SCM processes i.e. no 
bid awards are made where budget is not available; 

b) Purchase orders are only processed where budget is available; 

c) Contract management unit has been established with the SCM unit to monitor 
supplier performance; 

d) Expenditure Management Committee is in place; 


There were no significant changes in the iLembe District Municipality’s financial viability 
objectives from the previous financial years. There was however, a significant refinement in 
the strategies put in place to achieve the objectives and how the achievement of these 
objectives would be measured and over what time period progress would be measured. The 
strategies are slowing beginning to bear positive results with the cash position remaining within 
the norm of 1-3 months and the overall creditors reducing. 


5.7 ANALYSIS OF ILEMBE DISTRICT MUNICIPALITY'S FINANCIAL STATEMENTS 
INCLUDING SIGNIFICANT CHANGES AND TRENDS IN THE FINANCIAL 
POSITION, FINANCIAL PERFORMANCE AND CASHFLOWS 


The following analysis of trends includes those financial items that are important and 
significant to gaining a better understanding of the financial position, financial 
performance and cash flows and changes in financial position, financial performance 
and cash flows over the 2018/19 financial year. It also describes the significant items, 
transactions and events that have affected the financial position, financial 
performance and cash flows of iLembe District Municipality in the 2018/19 financial 
year. 


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5.7.1 MUNICIPALITY’S FINANCIAL POSITION, FINANCIAL PERFORMANCE AND 
CASH FLOWS. 

The analysis is broken down into financial position, financial performance and cash 
flows. 

(a) Financial Position 

The iLembe District Municipality was in a net assets position as at 30 June 2019 i.e. the total 
assets exceeded the total liabilities by over a billion rand. The following financial items 
presented in the statement of financial position of the District Municipality are important and 
significant in gaining the understanding of the financial position of IDM: 

(b) Cash and cash equivalents 

Cash and cash equivalents accounted for 55% of current assets and 6.16% of the total assets 
of the municipality. This has improved compared to the 2017/2018 financial year 

(c) Trade and other receivables from exchange transactions 

Trade and other receivables from exchange transactions accounted for 36% of current assets 
and 4% of the total assets of the municipality. It has increased by 11% compared to the prior 
year mainly due to the growing debtor’s book and no write off of bad debts for 2 financial years 
and low revenue collection rate. 

(d) Trade and other receivables from non-exchange transactions 

Trade and other receivables from non-exchange transactions comprised mainly of amounts 
Department of Cooperative Governance & Traditional Affairs, R16 million in respect of MIG 
funded projects. Trade and other receivables from non-exchange transactions accounted for 
5.2% of current assets and 0.6% of the total assets of the municipality. It has decreased by 
50% compared to the prior year mainly due to over performance in the implementation of 
Municipal Infrastructure Grant. 

(e) Inventories 

Inventories accounted for 3.6% of current assets and less than 0.39% of the total assets of the 
municipality. It has increased by 42% compared to the prior year mainly due to the number of 
meter connections and issues on infrastructural repairs. 


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(f) Property, plant and equipment 

Property, plant and equipment accounted for 98% of non - current assets and 87.5% of the 
total assets of the municipality, it has increased by 4.5% compared to the prior year mainly 
due to the continued rollout of infrastructure projects aimed at eradicating the existing backlogs 
as well as refurbishment of ageing infrastructure. 

(g) Trade and other payables from exchange transactions 

Trade and other payables from exchange transactions comprised mainly of amounts owed for 
trade creditors. Trade and other payables from exchange transactions accounted for 67% of 
current liabilities and 50% of the total liabilities of the municipality. It has decreased by 10.6% 
compared to the prior year mainly due to a reduction in the amount of unpaid creditor invoices 
at year end. 

(h) Trade and other payables from non-exchange transactions 

Trade and other payables from non-exchange transactions (Unspent conditional grants) 
comprised of the savings from the Provincial Township Establishment Grant which the 
Municipality has made a formal application through the KZN Provincial Department of Co¬ 
operative Governance and Traditional Affairs (CoGTA) to redirect these savings to other 
service delivery initiatives. Unspent conditional grants accounted for 29.1 % of current liabilities 
and 22% of the total liabilities of the municipality. It has increased compared to the prior year 
due mainly to objections in the awarding of contracts linked to RBIG funded projects and the 
late receipt of WSIG funding from the Department of Water and Sanitation. 

(i) Current And Non - Current borrowings 

Current borrowings accounted for 2.8% of current liabilities and 2.16% of the total liabilities. It 
has decreased by 15.5% compared to the prior year due to redemption of loan capital amounts 
during 2018/19 financial year. 

Non - current borrowings accounted for 83% of non - current liabilities and 20% of the total 
liabilities of the municipality. It has decreased by 6.2% compared to the prior year due to 
delayed payments of loan instalments. 

(j) Financial Performance 

iLembe District Municipality had an overall surplus of R186 million in the 2018/19 financial year 
compared to the surplus of R309 million in the prior year. The decreased by R123 million 
compared to prior year is due to lesser government grant allocations during 2018/19. The 

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following financial items presented in the statement of financial performance of the iLembe 
District Municipality are important and significant in gaining the understanding of the financial 
performance of I DM. 

(k) Revenue from exchange transactions 

Revenue from exchange transactions accounted for 20% of the total revenue of the 
municipality. It has increased by 20% compared to the prior year. 

(l) Government grants and subsidies 

IDM is currently dependent on Grants and Subsidies. Grants and subsidies accounted for 79% 
of the total revenue of the municipality. It has decreased by 4% compared to the prior year due 
to lesser grant allocations during the year under review. 

(m) Employee related costs 

Employee related costs accounted for 25% of the total operating expenditure. It has increased 
by 7.6% compared to the prior year which in the main account for cost of living adjustments as 
agreed to through the collective bargaining processes. 

(n) Remuneration of councillors 

Remuneration of councillors accounted for 1 % of the total operating expenditure. 

(o) Debt impairment/Bad debts provision 

Debt impairment provision accounted for 8.2% of the total operating expenditure after taking 
into account impairment. It has increased by 56% compared to the prior year due to an 
increase in the debt book and write off of bad debt in the last 2 financial years. 

(p) Depreciation, impairment and amortization 

Depreciation, impairment and amortization transactions accounted for 13% of the total 
expenditure of the municipality. It has increased by 26% compared to the prior year due to 
more projects being capitalized. 

(q) Repairs and maintenance 

Repairs and maintenance accounted for 4.7% of the total operating expenditure. It has 
decreased by 37% compared to the prior year. 

(r) Finance costs 


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Finance costs accounted for just less than 1% of the total operating expenditure. It has 
decreased by 32% compared to the prior year which is mainly attributable to changes in 
interest rates. 

(s) Bulk purchases 

The Bulk purchases relate to bulk water purchases mainly from Umgeni Water and it accounts 
for 17% of the total operating expenditure. It has increased by 37% compared to the prior year 
due to inflationary and volume increases. 

(t) General expenses 

General expenses comprises mainly of electricity and water, fuel and oil, LED expenditure, 
telephone costs, audit fees and various other expenditure items. It accounted for 14% of the 
operating expenditure and has decreased by 2% compared to prior year. This is mainly due to 
the implementation of financial turnaround strategy that was adopted by Council in December 
2017. 

(u) Cash flows 

The District Municipality was in a positive cash and cash equivalent position of R174 million as 
at 30 June 2019. The following financial items presented in the cash flow statement are 
important and significant in gaining the understanding of the cash flow position of IDM. 

(v) Sales of goods and services/ receipts from consumer debtors 

Receipts from consumer debtors accounted for 19% of the total cash inflows and has increased 
by 45% compared to prior year. 

(w) Grant receipts 

Grant receipts accounted for 80% of total cash inflows and have increased by 3.92% compared 
to the prior year mainly due to slight increase in grant allocations during the year under review. 

(x) Purchase of fixed assets/ capital expenditure 

Investment in assets/ capital expenditure payments accounted for almost 36% of the total cash 
outflows and has decreased by 29% compared to the prior year mainly due to low spending 
on WSIG and RBIG. 

(y) Payments to suppliers 

Payments to suppliers accounted for 72% of the total cash outflows. 


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(z) Employee costs including remuneration of councillors 
Payment to employees accounted for 27% of the total cash outflows and has increased by 
6.7% compared to the prior year which is mainly attributable to the standard cost of living 
adjustments. 

5.7.2 SIGNIFICANT FINANCIAL RATIO ANALYSIS 

The Annual Financial Statements (AFS) becomes more meaningful when information is 
analysed and interpreted. The objective of this section is to provide an analysis of the financial 
position, financial performance and cash flows of the iLembe District Municipality by performing 
ratio analysis specific to local government. This exercise also assesses the financial strength 
of the iLembe District Municipality. These ratios, as applied, provide interpretation 
methodologies that will add significant value when benchmarked against similar municipalities. 
These ratios are grouped into three (3) categories i.e. Revenue and Expenditure Management, 
Asset Management and Debt/Liability Management. 

(a) Revenue and Expenditure Management 

Ratio 1: Actual revenue versus budgeted revenue 

The purpose of this ratio is to measure the extent of Actual Operating Revenue (Excl. Capital 
Grant Revenue) received in relation to Budgeted Operating Revenue during the financial year 
under review. The acceptable norm is 95%. 

The formula is Actual Operating Revenue / Budgeted Operating Revenue x 100. 

Analysis 

IDM has achieved 95% of its budgeted operating revenue in the 2018/19 financial year 
compared to 84% in the 2017/18 financial year. The 1% decline is indicative of billing 
challenges that embroiled the Revenue Department in recent years which the Municipality has 
developed strategies to improve and bring the function of that business process back on track. 

Ratio 2: Level of reliance on government grants 


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The purpose of this ratio is to determine what percentage of the municipality’s revenue is made 
up of government grants to determine the level of reliance on government funding by the 
municipality. Generally, district municipalities are more reliant on grants and subsidies than the 
metros and local municipalities due to the fact that the district municipalities do not have an 
adequate revenue base. 

The formula is (Grants and subsidies/ Total Revenue). 

Analysis 

I DM is reliant on government grants and subsidies. In the 2018/19 financial year it was 80% 
reliant compared to 83% in the 2017/18. The slight improvement on this ratio was only as a 
result of reduction in grant allocations for the year and slight improvements in own generated 
income. 

Ratio 3: Actual expenditure versus budgeted expenditure 

The purpose of this ratio is to measure the extent to which Budgeted Expenditure has been 
spent during the financial year under review. The ratio also assess whether the municipality 
has effective controls in place to ensure that expenditure is incurred in accordance with an 
approved budget. The acceptable norm is 95% 

The formula is (Actual expenditure - budgeted Expenditure)/ Budgeted Expenditure. 

Analysis 

The percentage expenditure for 2018/19 was 105% compared to 102% for 2017/18 financial 
year. Although this was above 100%, it was however, still within the acceptable variance in 
terms of the norms. 

Ratio 4: Personnel expenditure as a percentage of total expenditure 

The purpose of this ratio is to indicate what percentage of total expenditure is attributable to 

personnel costs. It must be stated that the National Treasury guideline is 25% - 40%. 

The formula is (Salaries, wages and allowances/ Total operational expenditure). 

Analysis 

The ratio for the 2018/19 financial year was 26,% compared to 29.3% in the previous financial 
year 2017/18 and it is within the National Treasury guideline of 25 40%. 

Ratio 5: Interest as a percentage of total operating expenditure 


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The purpose of this ratio is to indicate the cost required to service the borrowing. It assesses 
the Borrowing or Payment obligation expressed as a percentage of Total Operating 
Expenditure. The acceptable norm is between 6 and 8%. 

The formula is Capital Cost (Interest Paid and Redemption) / Total Operating Expenditure x 
100 . 

Analysis 

The ratio for the 2018/19 financial year was 1% compared to the ratio of 1.6% in the previous 
financial year and it is consistently below the National Treasury guideline of 6 - 8%. 

The low ratio reported indicates that iLembe District Municipality is less reliant on external 
borrowings hence exposed to low cost of debt. 

Ratio 6: Repairs and maintenance as a percentage of total expenditure 
The purpose of this ratio is to measure the level of repairs and maintenance to ensure 
adequate maintenance to prevent breakdowns and interruptions to service delivery. Repairs 
and maintenance of municipal assets is required to ensure the continued provision of services. 
National Treasury guideline is 8%. The formula is Total Repairs and Maintenance Expenditure 
/ Property, Plant and Equipment and Investment Property (Carrying Value) x 100. 

Analysis 

The ratio for 2018/19 financial year is 1.5%. This ratio is below the National Treasury guideline 
of 8%. This is one area that Management would need to look at and develop plans to address 
going forward. 

(b) Asset Management 

Ratio 7: Capital expenditure to total expenditure 

The purpose of this ratio is to assess the level of Capital Expenditure to Total Expenditure, 
which indicates the prioritization of expenditure towards current operations versus future 
capacity in terms of Municipal Services. The formula is Total Capital Expenditure / Total 
Expenditure (Total Operating Expenditure + Capital Expenditure) * 100. The norm is between 
10 and 20%. 

Analysis 

The ratio for the 2018/19 financial year was 26% which is less by 9% compared to the prior 
year ratio of 35%. Both ratios are above the treasury guideline of between 10 - 20%. 


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Ratio 8: Asset Turnover Ratios 

The purpose of these ratios is to establish the municipality’s efficiency in utilizing its assets to 
generate revenue. They indicate how successful the municipality is using its assets to generate 
revenue. The National Treasury has not yet issued a guideline on the acceptable norm in the 
Local Government space. A higher ratio indicates that the municipality is using its assets 
efficiently; a lower rate indicates that the municipality is not using its assets optimally. Total 
asset turnover ratio is the key driver on return on community wealth/net assets. There are a 
number of variants of the ratio like total assets turnover ratio, fixed assets turnover ratio and 
working capital turnover ratio. In all cases the numerator is the same i.e. net revenue from 
exchange transactions but the denominator is not the same i.e. average total assets, average 
fixed assets and average working capital. 

For the purposes of this report the following formulas are used to calculate asset turnover 
ratios: 

a. Total Assets Turnover Ratio : Net Revenue from Exchange Transactions/ 
Average total assets 

b. Fixed Assets Turnover Ratio: Net Revenue from Exchange Transactions/ 
Average fixed assets 

Analysis 

Total Assets Turnover Ratio 

The ratio for the 2018/19 financial year was 0.07 and 0.06 for the 2017/2018 year 
(c) Fixed Assets Turnover Ratio 

iLembe District Municipality’s ratio for the 2018/19 financial year is 0.311 and 0.346 for the 
2017/2018 year. 

Ratio 9: Debtors collection period 

This ratio adjusts for Municipality's who have had significant write-offs of Irrecoverable Debtor 
balances in the Gross Debtors Days analysis as it only assesses the performance of 
collectable Debtors. In addition, it provides an indication of the quality of credit control policy, 
effectiveness of the implementation thereof and quality of revenue management. If the ratio is 
above the norm, this indicates that the Municipality is exposed to significant Cash Flow risk. 
This is also an indication that the municipality is experiencing challenges in the collection of 
outstanding amounts due to it. Furthermore, it indicates that a significant amount of potential 

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cash is tied up in consumer debtors and the municipality must improve its revenue and cash 
flow management. The acceptable norm as per National Treasury is 30 days. 

The formula is (Consumer debtors after provision for bad debts *365/ Service Revenue) 

Analysis 

The ratio for the 2018/19 was 212 days has improved by 16 days compared to the prior year 
ratio of 228 days. 

(d) Overall Asset Management Analysis 

Although capital spending and/or investments in assets are high, there was a major 
underutilization of assets to provide optimal return on community wealth. This was mainly due 
to the ever increasing high social component of the services supply of 68%. It is also taking 
too long to convert the generated revenue into cash, which has exerted a major strain on the 
working capital. 

i. Debt/Liability Management and/or Solvency and Liquidity ratios 
Ratio 10: Acid Test Ratio 

The purpose of this ratio is to indicate the municipality’s ability to meet its short term obligation 
using its most liquid assets. The acceptable norm is 1:1. 

The formula is (Current Assets - Inventory)/ Current liabilities. 

Analysis 

The ratio for the 2018/19 financial year is 1,14:1, this has increased compared to the prior year 
ratio of 0.98:1. The ratio has improved from the 2017/2018 year to above the acceptable norm 
of 1:1. 

Ratio 11: Current Ratio 

The purpose of this ratio is to indicate the municipality’s ability to meet its short term obligation 
using all its liquid assets. The higher the current Ratio, the more capable the Municipality or 
Municipal Entity will be to pay its current or short-term obligations and provide for a risk cover 
to enable it to continue operations at desired levels. A financial ratio under 1 suggests that the 
Municipality or Municipal Entity would be unable to pay all its current or short-term obligations 
if they all fall due at any specific point. Current assets must therefore be increased to 

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appropriately cover current liabilities otherwise there is a risk that non-current assets will need 
to be liquidated to settle current liabilities. 

The acceptable norm is 1.5:1 to 2:1. 

The formula is Current Assets/ Current liabilities. 

Analysis 

The ratio for the 2018/19 financial year was 1,10:1 and the prior year ratio was 1.01:1 The ratio 
is below the acceptable norm of 1.5:1 to 2:1, this consistent decline in ratio indicate that 
municipality financial situation is against the ropes due to the historic poor collection rate 
coupled with high value of unpaid creditors invoices at year end. This ratio has improved has 
improved from the previous 2 financial years though it is still below the norm. The interventions 
put in place is starting to yield positive results. 

Ratio 12: Total Liabilities as a percentage of total assets (Debt Ratio) 

The purpose of this ratio is to indicate how much the municipality relies on debt to finance its 
assets. Maximum norm values is 60 - 70%. 

The formula is Total Liabilities/ Total Assets. 

Analysis 

The ratio for the 2018/19 financial year was 15% %, while it was 11.4% for the prior year. 

Ratio 13: Total Liabilities as a percentage of Net Assets (Debt to Equity Ratio) 

The purpose of this ratio is to indicate the municipality’s financial standing. Optimal debt to 
equity ratio is considered to be 1 i.e. Liabilities = Assets. A ratio higher than 1; may indicate 
that the municipality may not be able to generate enough cash to satisfy its obligations. 

The formula is Total Liabilities/ Net Assets. 

Analysis 

The ratio for the 2018/19 financial year was 0.17 and the prior year ratio is 0.11 The ratio 
shows that IDM's financial standing remains positive and sound as it has more than enough 
assets to convert into cash to meet its obligations. 

(e) Overall debt/liability management analysis 

Overall debt/liability management is considered good. A great improvement is required to 
manage liquidity most particularly on a short term basis. 


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5.8 THE PRINCIPAL RISKS AND UNCERTAINTIES THAT AFFECT ITS FINANCIAL 
POSITION, FINANCIAL PERFORMANCE AND CASH FLOWS, CHANGES SINCE THE 
LAST REPORTING DATE AND ITS STRATEGIES FOR BEARING OR MITIGATING 
THOSE RISKS AND UNCERTAINTIES 

The purpose of this section is to discuss iLembe District Municipality’s principal risks and 
uncertainties that affects its financial position, financial performance and cash flows and 
includes an explanation of how this relates to the objectives and strategies of the municipality. 
It also includes an explanation of how I DM manages its principal risks and uncertainties. 

5.8.1 PRINCIPAL RISKS AND UNCERTAINTIES AND HOW THEY RELATE TO THE 
OBJECTIVES AND STRATEGIES 

The principal risks and uncertainties affecting its financial position, financial 
performance and cash flows as disclosed in note 39 of the 2018/19 Separate Annual 
Financial Statements are as follows: 

a) Maximum credit risk exposure 

The Credit risk is the risk that a counter party to a financial instrument will fail to discharge 
an obligation and cause the municipality a financial loss. The items in the Annual Financial 
Statements that are exposed to credit risks are mainly cash deposits, cash equivalents and 
trade debtors. Credit risk, if not managed properly, may hinder the objective to increase its 
collection rate, improve net revenue collected, manage debtors’ book efficiently and increase 
the financial viability. The strategies of revenue enhancement, credit and debt collection 
management, indigent management, cash flow and investment management relates 
management of the credit risk exposure. 

b) Liquidity risk 

Liquidity risk is the risk that the municipality will not be able to meet its obligations as they fall 
due. IDM’s liquidity risk is as a result of the need for sufficient funds to be available to meet its 
liabilities when they fall due without incurring unacceptable losses or risking damage to the 
municipality's reputation. Liquidity risk, if not managed properly, may hinder the objective to 
increase its financial viability and to ensure that the municipality is solvent and able to cover 
its costs at any and all times. IDM’s strategies of cost and debt coverage management, cash 


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flow and expenditure management and payment of creditors relates to management of the 
liquidity risk. 

c) Interest rate risk 

Interest rate risk is the risk that the municipality will incur loss due to adverse changes in 
interest rates. The IDM’s interest rate risk arises from long - term borrowings. DBSA and 
finance lease borrowings issued at variable rates exposes the municipality to cash flow interest 
rate risk. ABSA loan issued at fixed rate expose the municipality to fair value interest rate risk. 
The debt ratio is fairly good; therefore, interest rate risk is accepted as insignificant. 

5.8.2 HOW ILEMBE DISTRICT MUNICIPALITY MANAGES ITS RISKS AND 
UNCERTAINTIES 

The District Municipality manages its principal risks and uncertainties affecting its financial 
position, financial performance and cash flows as disclosed in note 40 of the 2017/2018 Annual 
Financial Statements as follows: 

a) Maximum credit risk exposure 

IDM only deposits cash with major banks with high quality credit standing and limits its 
exposure to any one counter-party i.e. Cash deposits/investments are diversified and are not 
put into one basket. Trade receivables comprise a widespread customer base. Management 
evaluates credit risk relating to customers on an on-going basis. If consumers are 
independently rated, these ratings are used. Otherwise, if there is no independent rating, risk 
control assesses the credit quality of the customer, taking into account its financial position, 
past experience and other factors. There is also an indigent programme in place to support 
vulnerable groups. The intelligent meter project is also currently underway and it aims to 
mitigate the credit risk relating to consumer debtors. 

b) Liquidity risk 

The approach to managing liquidity risk is to ensure that sufficient liquid assets are available 
to meet its liabilities when they fall due without unacceptable losses or risking damage to the 
municipality’s reputation. The District Municipality manages its liquidity risk through on-going 
review of future commitments and credit facilities. Cash flow forecasts are prepared and 
monitored and adequate utilised borrowing facilities are monitored. Expenditure and Revenue 
Management Committee is also in place to manage amongst other things, liquidity risk. The 
liabilities must be backed by appropriate assets and significant liquid resource. 


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CHAPTER 6: AUDITORS GENERAL AUDIT FUNDINGS 

COMPONENT A - AUDITOR GENERAL'S OPINION OF THE FINANCIAL STATEMENTS 
2018/19 

Report of the auditor-general to the KwaZulu-Natal Provincial Legislature and the Council on 
iLembe District Municipality and its controlled entity 


Report on the audit of the consolidated and separate financial statements 

Opinion 

1. I have audited the consolidated and separate financial statements of the ILembe District 
Municipality and its subsidiary( the group)set out on pages 203-257, which comprise the 
consolidated and separate statement of financial position as at 30 June 2019, the 
consolidated and separate statement of financial performance, statement of changes in 
net assets, cash flow statement and the statement of comparison of budget information 
with actual information for the year then ended, as well as the notes to the consolidated 
and separate financial statements, including a summary of significant accounting policies. 

2. In my opinion, the consolidated and separate financial statements present fairly, in all 
material respects, the consolidated and separate financial position of the group as at 30 
June 2019, and their financial performance and cash flows for the year then ended in 
accordance with South African Standards of Generally Recognised Accounting Practice 
{SA Standards of GRAP) and the requirements of the Municipal Finance Management Act 
of South Africa, 2003 (Act No. 56 of 2003) (MFMA) and the Division of Revenue Act of 
South Africa, 2018 (Act No. 1 of 2018) (Dora). 

Basis for opinion 

3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). 
My responsibilities under those standards are further described in the auditor-general’s 
responsibilities for the audit of the consolidated and separate financial statements section 
of this auditor’s report. 

4. I am independent of the group in accordance with sections 290 and 291 of the International 
Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants and, 
parts 1 and 3 of the International Ethics Standards Board for Accountants’ International 
code of ethics for professional accountants (including International Independence 
Standards) (IESBA codes), as well as the ethical requirements that are relevant to my 


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audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with 
these requirements and the IESBA codes. 

5. 1 believe that the audit evidence I have obtained is sufficient and appropriate to provide a 
basis for my opinion. 

Emphasis of matter 

6. I draw attention to the matter below. 

Material losses 

7. As disclosed in note 36.8 to the financial statements, the municipality incurred material 
water losses of 17 954 624 kilolitres (2017-18: 9 949 871 kilolitres) which resulted in 
revenue losses of R187,89 million (2017-18: R83.36 million). The losses were mainly due 
to illegal connections, main leaks, reservoir overflows and service connection leaks. 

Other matter 

8. I draw attention to the matter below. 

Unaudited disclosure note 

9. In terms of section 125(2)(e) of the MFMA, the municipality is required to disclose 
particulars of non-compliance with the MFMA in the consolidated and separate financial 
statements. This disclosure requirement did not form part of the audit of the financial 
consolidated and separate financial statements and, accordingly, I do not express an 
opinion on it. 

Responsibilities of accounting officer for the financial statements 

10. The accounting officer is responsible for the preparation and fair presentation of the 
consolidated and separate financial statements in accordance with the SA Standards of 
GRAP and the requirements of the MFMA and Dora and for such internal control as the 
accounting officer determines is necessary to enable the preparation of the consolidated 
and separate financial statements that are free from material misstatement, whether due 
to fraud or error. 

11. In preparing the consolidated and separate financial statements, the accounting officer is 
responsible for assessing the group's ability to continue as a going concern, disclosing, as 
applicable, matters relating to going concern and using the going concern basis of 
accounting unless the appropriate governance structure either intends to liquidate the 
group or to cease operations, or has no realistic alternative but to do so. 


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Auditor-general’s responsibilities for the audit of the consolidated and separate financial 
statements 

12. My objectives are to obtain reasonable assurance about whether the consolidated and 
separate financial statements as a whole are free from material misstatement, whether 
due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable 
assurance is a high level of assurance, but is not a guarantee that an audit conducted in 
accordance with the ISAs will always detect a material misstatement when it exists. 
Misstatements can arise from fraud or error and are considered material if, individually or 
in aggregate, they could reasonably be expected to influence the economic decisions of 
users taken on the basis of these consolidated and separate financial statements. 

13. A further description of my responsibilities for the audit of the consolidated and separate 
financial statements is included in the annexure to this auditor’s report. 


Report on the audit of the consolidated annual performance report 

Introduction and scope 

14. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) 
and the general notice issued in terms thereof, I have a responsibility to report material 
findings on the reported performance information against predetermined objectives for the 
selected development priority presented in the annual performance report. I performed 
procedures to identify findings but not to gather evidence to express assurance. 

15. My procedures address the reported performance information, which must be based on 
the approved performance planning documents of the municipality. I have not evaluated 
the completeness and appropriateness of the performance indicators included in the 
planning documents. My procedures also did not extend to any disclosures or assertions 
relating to planned performance strategies and information in respect of future periods that 
may be included as part of the reported performance information. Accordingly, my findings 
do not extend to these matters. 

16. I evaluated the usefulness and reliability of the reported performance information in 
accordance with the criteria developed from the performance management and reporting 
framework, as defined in the general notice, for the basic service delivery development 
priority presented in the annual performance report of the municipality for the year ended 
30 June 2019. 

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177 




17. I performed procedures to determine whether the reported performance information was 
properly presented and whether performance was consistent with the approved 
performance planning documents. I performed further procedures to determine whether 
the indicators and related targets were measurable and relevant, and assessed the 
reliability of the reported performance information to determine whether it was valid, 
accurate and complete. 

18. The material finding in respect of the usefulness and reliability of the selected development 
priority is as follows: 

Number of jobs created through water infrastructure and service delivery efforts (labour 

intensive construction - LIC) 

19.1 was unable to obtain sufficient appropriate audit evidence for the reported achievement 
of the number of jobs created through water infrastructure and service delivery efforts 
(labour intensive Construction - LIC). This was due to attendance registers and time sheets 
that support the target not having been provided. I was unable to confirm the reported 
achievement by alternative means. Consequently, I was unable to determine whether any 
adjustments were required to the achievement of 1168 jobs created as reported in the 
annual performance report. 

Other matters 

20. I draw attention to the matters below. 

Achievement of planned targets 

21. The annual performance report on pages 61-94 includes information on the achievement 
of planned targets for the year. This information should be considered in the context of the 
material finding on the usefulness and reliability of the reported performance information 
in paragraph 19 of this report. 

Adjustment of material misstatements 

22. I identified material misstatements in the annual performance report submitted for auditing. 
These material misstatements were on the reported performance information of the basic 
service delivery development priority. As management subsequently corrected only some 
of the misstatements, I raised a material finding on the usefulness and reliability of the 
reported performance information. Those that were not corrected are reported above. 


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Report on the audit of compliance with legislation 

Introduction and scope 

23. In accordance with the PAA and the general notice issued in terms thereof, I have a 
responsibility to report material findings on the compliance of the municipality with specific 
matters in key legislation. I performed procedures to identify findings but not to gather 
evidence to express assurance. 

24. The material findings on compliance with specific matters in key legislation are as follows: 

Annual financial statements 

25. The financial statements submitted for auditing were not prepared in all material respects 
in accordance with the requirements of section 122(1) of the MFMA. Material 
misstatements of current assets, current liabilities, expenditure and disclosure items 
identified by the auditors in the submitted financial statements were subsequently corrected 
and the supporting records were provided subsequently, resulting in the financial 
statements receiving an unqualified audit opinion. ■ 

Expenditure management 

26. Money owed by the municipality was not always paid within 30 days, as required by section 
65(2)(e) of the MFMA. 

27. Reasonable steps were not taken to prevent irregular expenditure of R74,93 million as 
disclosed in note 35.3 to the annual financial statements, as required by section 62(1 )(d) 
of the MFMA. The majority of the irregular expenditure was caused by expenditure incurred 
on security services as a result of contract extensions that were applied. 

Procurement and contract management 

28. Some of the contracts were extended or modified without the approval of a properly 
delegated official, in contravention of supply chain management regulation 5(SCM). 

Consequence management 

29. Some of the unauthorised expenditure incurred by the municipality was not investigated to 
determine if any person is liable for the expenditure, as required by section 32(2)(a) of the 
MFMA. 

30. Some of the irregular expenditure and fruitless and wasteful expenditure incurred by the 
municipality were not investigated to determine if any person is liable for the expenditure, 
as required by section 32(2)(b) of the MFMA. 


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179 




31. Some of the losses resulting from irregular expenditure were not recovered from the liable 
person, as required by section 32(2) of the MFMA. 

32. Appropriate action was not taken against officials of the municipality where investigations 
proved financial misconduct, as required by section 171(4)(b) of the MFMA and municipal 
regulations on financial misconduct procedures and criminal proceedings 6(8). 

33. Cases of financial misconduct which constitute a crime committed by officials were not 
always reported to the South African Police Service, as required by the municipal 
regulations on financial misconduct procedures and criminal proceedings 10(1). 


Other information 

34. The accounting officer is responsible for the other information. The other information 
comprises the information included in the annual report. The other information does not 
include the consolidated and separate financial statements, the auditor's report and the 
selected development priority presented in the annual performance report that has been 
specifically reported in this auditor’s report. 

35. My opinion on the consolidated and separate financial statements and findings on the 
reported performance information and compliance with legislation do not cover the other 
information and I do not express an audit opinion or any form of assurance conclusion 
thereon. 

36. In connection with my audit, my responsibility is to read the other information and, in doing 
so, consider whether the other information is materially inconsistent with the consolidated 
and separate financial statements and the selected development priority presented in the 
annual performance report, or my knowledge obtained in the audit, or otherwise appears 
to be materially misstated. 

37. I did not receive the other information prior to the date of this auditor's report. When I do 
receive and read this information, if I conclude the there is a material misstatement therein, 
I am required to communicate the matter to those charged with governance and request 
that the other information be corrected. If the other information is not corrected, I may have 
to retract this auditor’s report and re-issue an amended report as appropriate. However, if 
it is corrected this will not be necessary. 

Internal control deficiencies 

38. I considered internal control relevant to my audit of the consolidated and separate financial 
statements, reported performance information and compliance with applicable legislation; 
however, my objective was not to express any form of assurance on it. 


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180 




39. The matters reported below are limited to the significant internal control deficiencies that 
resulted in the findings on the annual performance report and the findings on compliance 
with legislation included in this report. 

40. Management did not prepare accurate and complete financial and performance reports 
that are supported and evidenced by reliable information as material misstatements were 
identified in the annual financial statements and the annual performance report. 

41. The review and monitoring of compliance with the laws and regulations were not 
adequately implemented to prevent the material non-compliance identified. 


Other reports 

42. I draw attention to the following engagements conducted that had, or could have, an impact 
on the matters reported in the municipality’s consolidated and separate financial 
statements, reported performance information, compliance with applicable legislation and 
other related matters. These reports did not form part of my opinion on the consolidated 
and separate financial statements or my findings on the reported performance information 
or compliance with legislation. 

43. An independent consultant investigated eight cases of allegations relating to possible 
misappropriation of assets, fraud, financial misconduct and SCM irregularities, during the 
2016-17 financial year. Four cases were concluded during the 2018-19 financial year and 
the recommendations were implemented by the municipality for two of these cases. One 
was not finalised because the employee left the municipality. For the other case, the 
recommendations have not been implemented. The outcomes of the remaining four 
investigations were still in progress at the date of this report. 

44. An independent consultant is investigating an allegation of possible irregularities relating 
to the SCM processes followed, during the 2017-18 financial year. The investigation was 
still in progress at the date of this report. 

Pietermaritzburg 

17 December 2019 



AUDITOR GENERAL 


SOUTH AFRICA 



181 


181 





Annexure - Auditor-general’s responsibility for the audit 

1. As part of an audit in accordance with the ISAs, I exercise professional judgement and 
maintain professional scepticism throughout my audit of the financial statements, and the 
procedures performed on reported performance information for the selected development 
priority and on the municipality’s compliance with respect to the selected subject matters. 

Financial statements 

2. In addition to my responsibility for the audit of the consolidated and separate financial 
statements as described in this auditor’s report, I also: 

• identify and assess the risks of material misstatement of the consolidated and 
separate financial statements whether due to fraud or error, design and perform audit 
procedures responsive to those risks, and obtain audit evidence that is sufficient and 
appropriate to provide a basis for my opinion. The risk of not detecting a material 
misstatement resulting from fraud is higher than for one resulting from error, as fraud 
may involve collusion, forgery, intentional omissions, misrepresentations, or the 
override of internal control 

• obtain an understanding of internal control relevant to the audit in order to design audit 
procedures that are appropriate in the circumstances, but not for the purpose of 
expressing an opinion on the effectiveness of the municipality’s internal control 

• evaluate the appropriateness of accounting policies used and the reasonableness of 
accounting estimates and related disclosures made by the accounting officer 

• conclude on the appropriateness of the accounting officer's use of the going concern 
basis of accounting in the preparation of the consolidated and separate financial 
statements. I also conclude, based on the audit evidence obtained, whether a material 
uncertainty exists related to events or conditions that may cast significant doubt on the 
ILembe District Municipality's ability to continue as a going concern. If I conclude that 
a material uncertainty exists, I am required to draw attention in my auditor’s report to 
the related disclosures in the consolidated and separate financial statements about 
the material uncertainty or, if such disclosures are inadequate, to modify the opinion 
on the consolidated and separate financial statements. My conclusions are based on 
the information available to me at the date of this auditor’s report. However, future 
events or conditions may cause a municipality to cease continuing as a going concern 

• evaluate the overall presentation, structure and content of the consolidated and 
separate financial statements, including the disclosures, and whether the consolidated 
and separate financial statements represent the underlying transactions and events in 
a manner that achieves fair presentation. 


182 


182 



• Obtain sufficient appropriate audit evidence regarding the financial information of the 
entities or business activities within the group to express an opinion on the consolidated 
financial statements. I am responsible for the direction, supervision and performance 
of the group, audit. I remain solely responsible for my audit opinion. 

Communication with those charged with governance 

3. I communicate with the accounting officer regarding, among other matters, the planned 
scope and timing of the audit and significant audit findings, including any significant 
deficiencies in internal control that I identify during my audit. 

4. I also confirm to the accounting officer that I have complied with relevant ethical 
requirements regarding independence, and communicate all relationships and other 
matters that may reasonably be thought to have a bearing on my independence and, 
where applicable, related safeguards. 


183 


183 



COMPONENT B: CONSOLIDATED AUDIT RESPONSE PLAN OF ILEMBE DISTRICT 
MUNICIPALITY AND ITS ENTITY: 2018/19 


184 


184 


Nature Of Audit Audit Query 


in 

00 



185 


(PRV’s), to deal with high water pressure and 
minimise on burst pipes; 

Replacement of Aging infrastructure 







Audit Query 

Action Plan 


Audit Response Progress (Quarter 2) 

1. Misstatement In 

Financial 

Statements: 

Trade 

Receivables- 

Exchange 

It was noted that 

there is a grant 

receivable 

recognized under 

Trade Receivables 

for an amount of 

R43 085 764 

related to the MIG 

grant. 

Corrections were 

made in the AFS. 

Monitoring of MIG 

expenditure is 

now monitored 

against CoGTA’s 

records through 

the MIG MIS 

system in order to 

identify and rectify 

any 

discrepancies. 

Manager 

Expenditure has 

been provided 

with necessary 

training and 

granted access to 

the MIG MIS for 

purposes of 

exercising the 

required 

monitoring. 

Responsible 

Official 

Manager 

Expenditure 

Target Date 

31 March 2020 

Discrepancies have been identified and the issues that gave 

rise to these discrepancies are being addressed with Technical 

Services Department 


187 


187 



Audit Query 

Action Plan 


! 

Audit Response Progress (Quarter 2) 

i 

2. Misstatement In 

Financial 

Statements: 

Invoices For 

Expenses Not 

Raised As An 

Accrual In The 

Correct Period 

Invoices in 

expenses were not 

raised in the correct 

period that being in 

the 2018/19 

financial year 

Management 

subsequently 

corrected the 

identified 

misstatement in 

the AFS by 

matching the 

invoices which 

were a subject of 

the audit query to 

the relevant 

reporting periods 

to which those 

invoices related. 

This only related 

to Umgeni Water 

for the bulk 

purchases 

invoices 

Umgeni Water 

has been 

requested to 

provide with water 

bills earlier than 

they used to so 

that processing of 

invoices can be 

correctly aligned 

to the reporting 

periods to which 

they relate. 

Responsible 

Official 

Manager 

Expenditure 

Umgeni Water has been engaged to supply us with December 

2019 bill at least by the 3 rd of January 2020 so that an accrual 

can be made within December 2019 posting period in order to 

! 

i achieve the correct alignment for the first 6 months. 

i 

i 

i 


188 


188 



Action Plan 


Audit Response Progress (Quarter 2) 


3. Misstatement In The 


Financial 

Statements: 

Incorrectly 

Disclosed 

Contigent 

Liability 


The contingent 
liability in relation to 
Umgeni water for an 
amount of 


Target Date 

15 January 2020 

Management 
undertook an 
assessment as 
guided by GRAP 


R45 385 302 for the and came into 


expenditure to build 
the spring groove 
dam and the costs 
were to be shared 
by the 

municipalities 
based on the 
principle of cross 


required from the 
municipality to 
settle the 

expenditure and 
management is 
currently making 
arrangement with 
Umgeni on settling 
the amount owed 
and therefore the 
obligation exists 
and obligation can 
be reliably 

measured at 


The first assessment is set to be conducted in December 2019 
to determine whether or not the provision is still required. 


conclusion that it 
would be 

appropriate to 
disclose the 
amount raised by 
Umgeni Water for 
Capital Unit 
Charges as a 


subsidisation. As at Provision, 
reporting date was 
probably that an 

outflow of economic An assessment 
benefit will be will be conducted 


on a quarterly 
basis to determine 
whether or not it is 
still prudent to 
account for the 
provision. 

Responsible 

Official 

Manager 

Expenditure 

Target Date 


31 December 


R45 385 302. 


189 


189 




Audit Query 

Action Plan 


Audit Response Progress (Quarter 2) 


This incorrect 

accounting 

treatment have 

resulted in a 

material 

understatement of 

liabilities and 

material 

overstatement of 

the contingent 

liability. 



4. Misstatement In 

Financial 

Statements: 

Commitments 

Incorrectly 

Disclosed 

It was noted that the 

commitment 

schedule has been 

incorrectly 

calculated and led 

to a material 

misstatement of the 

disclosure note in 

the annual financial 

statements. This is 

due to the incorrect 

contract amounts 

used and incorrect 

payments up to 

date that is due to 

incorrect VAT 

percentage being 

used of which 

resulting in 

commitments with 

negative balances 

and some others 

Management 

recalculated the 

commitments 

amounts and 

corrected the 

disclosure in the 

Annual Financial 

Statements. 

Management is in 

the process of 

addressing 

weaknesses in the 

contract register 

with an intention 

of ensuring that 

that the 

contractual 

information that 

feeds into 

expenditure as 

well as contractual 

commitments are 

A meeting with all relevant parties will be scheduled for the 15 th 

of January 2020 to agree measures to address the weaknesse 

identified on the contract register. 


190 


190 







Audit Query 

Action Plan 


Audit Response Progress (Quarter 2) 


did not incudes VAT 

at all. 

all up to date and 

correctly aligned. 

Responsible 

Official 

Manager 

Expenditure 

Target Date 

30 April 2020 


5. Non- 

Compliance: 
Suppliers Not 

Paid Within 30 

Days 

Invoices 

outstanding for 

more than 30 days 

after receipt of the 

invoice by the 

municipality were 

noted. 

Invoice Process 

Procedure Manual 

which will serve as 

a guide on how to 

administer invoice 

processing will be 

formulated and 

implemented. 

Responsible 

Official 

Manager 

Expenditure 

Target Date 

30 April 2020 

The manual has been formulated and will be tabled at various 

Council Committees in January 2020 for adoption and thereaftt 

it will be implanted. 

6. Non- 

Compliance: 

Irregular 

Expenditure 

Was Not 

Prevented 

The municipality did 

not take reasonable 

steps to prevent 

irregular 

expenditure of R 

74 926 349 of this 

Management will 

make endeavours 

to ensure that 

these matters are 

reported to 

Management is currently reconciling all matters pertaining to 

UIFW from the past financial years for purposes of submitting 

the same to MPAC and Council in January 2020. 


191 


191 



Action Plan 


I 


Audit Response Progress (Quarter 2) 


Audit Query 

amount Council structures 

R20 144 619 was timeously. 
identified during the 
audit process. 

There was also Responsible 
irregular Official 

expenditure of 

Manager 

R346 969 258 that 

Expenditure 

was identified in the 

current year relating Target Date 

! to prior years. 30 April 2020 

The municipality did 
not adequately 
comply with the 
SCM regulation and 
did not implement 
appropriate cash 
| management 
process to ensure 
that the suppliers 
are paid in a timely 
manner. 

7. Non- No proper 

Compliance: investigations are 

Investigations conducted by 

For The Uifw MPAC and no 
Not Adequately indication of 

Performed investigation if there 

is an employee 
liable for the 
expenditure 
incurred. 

External 

investigation - 


192 


192 




Action Plan 


Audit Response Progress (Quarter 2) 


Audit Query 

report has been 
finalised however 
the 

recommendations 
have not been 
implemented. 


8 . 


Four cases have 
not been finalised 
since the previous 
audit report. 


Misstatements 

Reliability 

of 

In Annual 

number of 

jobs 

Performance 

created 

(1168) 

Report: 

could not 

be 

Reliability Of 

confirmed due to 

Performance 

inadequate 


Reported In 

supporting 


Annual 

information 


Performance 

provided 

(i.e. 

Report 

employment 



contracts, 

timesheets, and 


attendance 

registers) 


A standard IDM 
EPWP contract 
has been drawn 
up and *s to be ' 
shared with 
upcoming 
contractors 

The IDM tender 
document under 
the EPWP 

section, will be 
revised once more 
and list “contracts 
of employment 
and attendance . 
registers” as a 
requirement. 


Responsible 

Official 

Deputy Senior 
Manager: O & M 


193 


193 




Audit Query 

Action Plan 


Audit Response Progress (Quarter 2) 



Target Date 

November 2019 


9. Misstatements 

In Annual 

Performance 

Report: Epwp- 

Selection Of 

Qualifying 

Beneficiaries 

Various 

weaknesses were 

noted in respect of 

the implementation 

of the EPWP Code 

of Good Practice in 

the selection of 

EPWP participants/ 

beneficiaries. 

Management will 

consider checking 

the NCPR fist 

against our 

EPWPRS to 

ensure the 

alignment of the 

systems 

The EPWP 

employees who 

are employed for 2 

different phases of 
the same project 

will in future be 

indicated per 

phase. 

Responsible 

Official 

Deputy Senior 

Manager: 0 & M 

Target Date 

November 2019 



194 


194 




Action Plan 


Audit Query 
10. Irregular 


Irregular There was no Management 

Process To evidence to confirm made adjustments 

Appoint The that the to the AFS for the 

Contractor requirements of irregular 

section 116(3) of expenditure for all 

the MFMA was the contracts that 

followed by the were approved by 

municipality to EXCO. 


amend the current 
contract of the 
contractor. 


Management will 
review the 

contract register 
to identify all 
historical 

contracts where 
extensions were 
involved. For any 
contracts that did 
not follow the 
process, such will 
be classified as 
irregular and 
follow the 

requisite 

processes in 
terms of the 
MFMA for 

purposes of 
reporting and 
addressing the 
non-compliance. 


Responsible 


Audit Response Progress (Quarter 2) 


Management has just embarked on a process of reviewing 
contract register and this exercise will be finalized by 


31 January 2020. 


Official 


195 


Action Plan 


Audit Response Progress (Quarter 2) 


Manager 

Expenditure 

Target Date 
31 March 2020 


96 


196 









COMPONENT C: REPORT OF THE AUDIT COMMITTEE TO THE COUNCIL OF ILEMBE 
DISTRICT MUNICIPALITY FOR THE YEAR ENDED 30 JUNE 2019 

REPORT OF THE AUDIT COMMITTEE TO THE COUNCIL OF ILEMBE DISTRICT 
MUNICIPALITY FOR THE YEAR ENDED 30 JUNE 2019 

1. INTRODUCTION 

The purpose of this report is to communicate to the council the audit committee’s progress 
in carrying out its oversight responsibilities outlined in section 166 of the Municipal 
Finance Management Act, 2003 (Act No. 56 of 2003, as amended) (MFMA), read with 
circular 65 published by the National Treasury for the year ended 30 June 2019. 

The MFMA obliges every municipality to establish an independent audit committee, which 
must advise the municipal council, political office- bearers, accounting officer and 
management staff of the municipality as well as the accounting officer and the 
management staff of the municipal entity. The audit committee is governed by formal 
terms of reference, which are regularly reviewed and approved by the council. The 
committee is pleased to present its report for the financial year ended 30 June 2019. 

2. LEGAL FRAMEWORK GOVERNING THE AUDIT COMMITTEE 

The Audit Committee and Performance Audit Committee is established in accordance 
with section 166 of the Municipal Finance Management Act, Act no 56 of 2003 (MFMA) 
and section 14(2)(c) of the Local Government Municipal Planning and Performance 
Regulations, 2001 (Regulations). Consideration has also been given to MFMA Circular 
No. 65 issued by the National Treasury in November 2012 as well as the 
recommendations contained in the King Report on Corporate Governance for South Africa 
(King IV). The Committee was appointed by Council and is required by law to report to 
Council in terms of the MFMA. 

3. AUDIT COMMITTEE MEMBERS AND ATTENDANCE 

The Audit Committee comprised of five independent members including the chairperson. 
In terms of section 166(4)(b) of the MFMA, the audit committee must meet at least four 
times a year. During 2018/2019 financial year there were four audit committee meetings 
held and the table below shows the members’ attendance at these meetings: 


197 


197 


Name 

! 

Date of 

appointment 

Meetings 

attended 

27-08- 

2018 

26-11- 

2018 

28-01- 

2019 

16-04- 

2019 

Mr VL Mtshali 

(Chairperson) 

01/02/2018 

04 

V 

V 

V 

V 

Mr S Z Hlophe 

01/02/2018 

03 

V 

V 

V 

X 

Ms S Gertze 

01/02/2018 

04 

V 

V 

V 

V 

Mr S L Ndlovu 

01/11/2014 

04 

V 

V 

V 

V 

, Ms B Zulu 

01/02/2018 

04 

V 

V 

V 

~ 1 ~ 


4. AUDIT COMMITTEE'S RESPONSIBILITY 

The Audit Committee has been set up in accordance with section 166 of the MFMA and 
operates within the terms of the Audit Committee Charter approved by the Municipal 
Council. 

In the conduct of its duties, the Audit Committee has performed the following statutory 
duties: 

4.1 Effectiveness of internal controls 

The Audit Committee, at each meeting, assessed performance against the plans and 
reviewed the plans to ensure that critical risks relating to the operations and the findings 
of the AuditorGeneral were addressed. 

The internal control environment in the municipality needs improvement, the Auditor 
General report raises internal control deficiencies and non-compliance that requires 
effective internal controls to address. 

The Auditor General concluded that management did not complete accurate and 
complete financial and performance reports, this is an indicator of internal control 
weaknesses. 

4.2 Internal Audit Function 

The internal audit function for the Municipality was performed in-house and it was 
operational for the reporting period and the risk-based internal audit plan for the financial 
year ending 30 June 2019 was approved by the Audit Committee. 


J98 


198 





The internal audit reports were tabled at the Audit Committee meetings held during the 
year. The internal audit reports included recommendations to improve internal controls 
together with agreed management action plans to resolve the issues reported on. The 
Audit Committee further assessed whether management implement the agreed upon 
actions to address the findings of internal audit. 

To further enhance the processes in place, internal audit conducted follow up audits on 
previously reported internal and external audit findings and reported progress to senior 
management and the Audit Committee. 

The internal audit unit capacity and resources need to be beefed up, the filling of critical 
vacancy of Audit Senior has been delayed and was not concluded in the financial year. 

4.3 Risk Management Function 

The Audit Committee is responsible for oversight of the risk management function. The 
risk management committee reports to the audit committee on the municipality’s 
management of risk. 

The Municipality conducted risk assessment workshops during the reporting period and 
the Risk Management Committee discussed and accepted the risk registers both 
operational and strategic, which were approved by the Executive Committee (EXCO). The 
audit committee noted and considered the risk registers and the updated risk registers. 

The Risk Management Committee is responsible for assessing whether the mitigating 
factors are implemented as agreed upon to avoid or reduce the risk exposure. 

4.4 Review of Annual Financial Statements 

The committee is concerned with the limited time allocated to AFS review and the 
correction of errors identified. A competent service provider was appointed to review 
AFS and the audit committee considered the review report and also did its own 
independent review. However not enough time was available for adjustments and 
review of final AFS. 

The AFS preparation plan must be drafted approve and the accounting officer must 
ensure compliance with all deadlines in the AFS process. 


199 


199 



The Auditor General concluded that the AFS were not prepared in terms of the MFMA, 
the unqualified audit opinion was achieved after adjustments were made during the 
audit to ensure the AFS complies with MFMA. 

4.5 Performance Management 

The Audit Committee also serves as the Performance Audit Committee for the 
Municipality. The legal responsibilities of the Audit Committee in this regard are set out in 
terms of paragraph 14 of the Local Government: Municipal Planning and Performance 
Management Regulations, 2001. 

The Audit Committee reviewed the quarterly performance reports and the internal audit 
reports on performance management for 2018/2019 financial year based on the 
Municipality’s approved scorecard. 

The Chairperson served on the evaluation panel in terms of the Local Government: 
Municipal Performance Regulations for Municipal Managers and Managers directly 
accountable to Council. 

COMPLIANCE WITH LEGISLATION 

Instances of non-compliance with laws, regulations, policies and procedures have been noted, 
mainly through disclosure by management and the reports submitted by internal and external 
audit. However, management have provided comments on the findings, indicated corrective 
measures and timing of the implementation thereof. In addition, compliance checklists have 
been developed and the Audit Committee is monitoring progress towards full compliance at 
its quarterly meetings. 

Council need to ensure compliance testing and reporting is improved in the municipality. 

RECOMMENDATIONS 

Section 121(3)(j) of the MFMA requires that the annual report must include any 
recommendations of the Municipality’s Audit Committee. 

Council advised to reflect on the Audit report submitted by Auditor General and request 
management to implement action plan to resolve the critical matters raised by the auditors. 
Council advised to monitor and follow up on effectiveness of management to resolve the 
Auditor General findings. 


200 


200 



Council advised to follow up on repeated findings and internal control weaknesses because 
these could have negative consequences in future. 

On behalf of the Audit Committee 



Mr VL Mtshali CA (SA) 
Chairperson 


201 


201 



CONSUMER DEBTOR ARREARS 


As at 30 June 2019, the following Councillors 'accounts were in arrears: 


ILEMBE DISTRICT MUNICIPALITY AND ITS CONTROLLED ENTITY 
NOTES TO THE FINANCIAL STATEMENTS 
COUNCILLOR'S ARREAR CONSUMER ACCOUNTS 



GROUP 

IDM 

GROUP 

IDM 

2019 

2019 

2018 

2018 

R 

R 

R 

R 

Councillor GJ Van Whye 

733,24 

733,24 

142 

142 

Councillor MS Singh 

1913,24 

1913,24 

- 

- 

Councillor MD Shandu 

163,41 

163,41 

- 

“ 

Councillor IP Dube 

745,24 

745,24 

- 

- 

Total Councillors Arrear 

Consumer Accounts 

3555,13 

3555,13 

142 

142 


202 


202 














CONSOLIDATED AUDITED ANNUAL FINANCIAL STATEMENTS 


203 


203 


Unaudited Ooneelfdeted Annual Financial S t a tement* 
far 


ILMUBE DISTRICT MUNICIPALITY AND ITS CONTROLLED ENTITY 
For the period ended 30 June 21 

Province: KwaZulu Natal 

AFS founding; ft (I.*. only cents) 


Contact Information: 

Name of Municipal Manager: Geoffrey Kumalo 

032 437 9560 

SagfftflvJtumaloOlla mbe^iovjfl 


Contact telephone number 
Contact e-mail address: 


Chief Financial Officer: 

Contact telephone number: 

Contact e-mal address: 

Name of contact at provincial 
treasury: 

Contact telephone number: 
Contact e-mail address: 

Name of relevant Auditor: 
Contact telephone number 
Contact e-mail address: 


Mahandra Chandulal 
032 4379503 

Mslwndre.ChandulsMBtenibc.aflv.afl 

Nokuthula Ndlovu 
033 0074376 

nokuMmlajliamaneiBlttntreaaurv.Bov.ia 

Auditor Ganeral 
033 264 7400 
AnwndaZ»te>n«axoja 


Naim of contact •( National 
Treasury: 

Contact telephone number: 
Contact e-mail addreea: 


Matsle 8ehlapelo 
m 315 5295 

MaWo.8ehlapelotBtreaaurv.qov.ia 



(LEMBE DISTRICT MUNtoPALfTY AND ITS CONTROLLED ENTRY 
CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 
For the period ended 30 June 2Q1B 


General Information 


Legal Form of Entity Municipality 

Nature of Business and Principal Activities Medium Capacity, Category C. District Municipality 


Hfs Worship, Councillor SMuduzo Stegarted Gumede 

Councaior Monltha Dolly Shandu 

Councillor Lucky Regfanakt Makhathlnf 

Councillor Sandesp Oudhram 

Coundltor Musawenkosi Aubrey Maphumuto 

Councillor Aubrey Mtofo Baartiman 

Councillor Andrew Gopaul 

Councillor Angel Lindiws Nzama 

Councillor Maureen Zola Mhtongo 

Councillor SIbonglla Rorence NtuD 

Coundltor Catherine Thotakde Khunwto 

Councillor Makhoslnl Oeamond Mpofu 

Coundltor Ntombenhle Cynthia Nero 

Coundltor Musawenkosi Simeon NtuO 

Councillor MOdhum S Singh 

Coundltor Innocent Ndumbo VilakazI 

Councillor Muz! Emmanuel Ngfdl 

Coundltor Innooentla Phumelate Dube 

Coundltor Redlwaatfi Singh 

Coundltor ThandekaStoenhlanhla Ngidl 

Coundltor James Gabanganl Van Whyo 

Coundltor PftHenion Sbonlso Goba 

Councillor Mamazam Veronica Shezf 

Coundltor Sillndlla Zpndi 

Coundltor TS Jati 

Councillor Happiness Nonhlanhla Ngcobo 
Coundltor Caroline Zama Ncalane 
Coundltor Nyettilkazl S2 
Coundltor Andlle Mazwf Gwala 
Coundltor MaQndl Virginia Mhtongo 
Coundltor (Soria Nompumeleb 
CouncOtor David Mthokozfel 


Mayor 

Deputy Mayor 
Speaker 

Member of the Executive Committee 

Member of the Executive Committee 

Member of the Executive Committee 

Member of the Executive Committee 

Member 

Member 

M ember 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

Member 

«WnMOT 

Member 

Member 

Member 

Member 


Accounting Officer 
Chief Financial Officer 
Grading of Local Authority 
Auditors 
Bankers 


NG Kumalo • Municipal Managerfrom 01 August 201S 

Mahendra ChandUlal From 2 October 2017 

Five 

The Auditor-General, South Africa 
First National Bank 


1 


205 



ILEMBE DISTRICT MUNICIPALITY 
CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 
For the period ended 30 June 2019 


General Information (continued) 


nembe House 

Physical address: Itembe House 

69/61 Mahatma Ghandhl Street 

KWADUKUZA 

4460 


Postal address: p.o Box 178B 

KWADUKUZA 

4450 


Telephone number: 
Fax number 
E-mail address: 


032437 8300 
032 4379584 
admlmSMIembantw ra 



ILEMBE DISTRICT MUNICIPALITY AND ITS CONTROLLED ENTITY DC29 
AUDITED CONSOLIDATED ANNUAL FINANCIAL STATEMENTS 
For the period ended 30 June 2019 


Accounting Officer’s Statement 

The Accounting Officer is required by the Municipal Finance 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 falrfy 
present the state of affaire of the municipality as at the end of the financial year and the results of 
Its operations and cash flows for the period then ended. The external auditors are swaged to 
express an Independent opinion on the annual financial statements and was given unrestricted 
access to all financial records and related date. The annual financial statements were prepared 
In accordance with Standards of Generally Recognised Ac-counting Practice (GRAP) as well sb 
relevant Interpretations,, guidelines and directives Issued by the Accounting Standards Board. 

Th !„f!I ni/al financteI «tatwnents are based upon appropriate accounting policies consistently 
applied and supported by reasonable and prudent judgements and estimates. I, as the Accounting 
Officer (accounting authority), acknowledge that I am ultimately responsible for the system of 
Internal Aranda] control established by the municipality and place considerable Importance on 
maintaining a strong control environment To enable me to meet these responsibilities, I have set 
standards for infernal control aimed at reducing the risk of error or deficit In a cost-effective 
manner. The standards indude the proper delegation of responsibilities within a dearly defined 
framework, effective accounting procedures and adequate segregation of duties to ensure an 
acceptable level of risk. These controls are monitored throughout the municipality and all 
employees are requbed to maintain the highest ethical standards In ensuring the munlctpaiity's 
business Is conducted In a manner that In all reasonable circumstances Is above reproach. The 
us of risk management In the munfdpaOly Is on Identifying, assessing, managing and 
monitoring all known forms of risk across the municipality. While operating risk cannot be folly 
eliminated, the municipality endeavours to minimise K by ensuring that appropriate infrastructure, 
controls, systems and ethical behaviour are applied and managed wfffdn predetermined 
procedures and constraints I am of the opinion, baaed on the Information and explanations given 
by management that the system of Internal control provides reasonable assurance that the 
financial records may be railed on for the preparation of the annual financial statements. 
However, any system of Internal financial control can provide only reasonable, and not absolute, 
assurance against matertai misstatement or deficit I have has reviewed the munldpeAty’s cash 
flow forecast for ths year to 30 June 2020 and. in the light of this review and the current financial 
position, I am satisfied that the municipality has or has access to adequate resources to continue 
h operational existence for the foreseeable future. The annual financial statements are prepared 
cm the basis that the municipality is a going concern and that the ILembe District Municipality has 
neither the Intention nor the need to liquidate or curtail materially the scale of the municipality. 
Although, I am primarily responsible for the financial affairs of the municipality, this Is supported 
by the municipality’s external auditors. I would Bke to bring to yow a ttent io n the following matertai 
matters to your attention: 





r oer ®y the aaiarlas, allowances and benefits of councillors as disclosed in note 24 to these 

annual financial statements- " - ■ - - """ 

of the Constitution of the Ri 
Bearers Act Act 20 of 1808 
in accordance with the Act 





N.G Kumalo 
Accountins Officer 


708 



ILEMBE DISTRICT MUNICIPALITY AND ITS CONTROLLED ENTITY 
ANNUAL FINANCIAL STATEMENTS 
For the period ended 30 June 2010 


inde* Pafl , 

Statement of Financial Position 5 

Statement of Financial Performance 8 

Statement of Changes in Net Assets 7 

Cash Flow Statement 8 

Statement of Comparison of Budget & Actuals g .10 

Accounting Pofldas 

Notes to the Annual Financial Statements 20-48 

Appendix A: Schedule of Bdemal Loans 46 

Appendix B: Analysis of Proparty, Plant and Equipment 47-48 

Appendix C: Segmental Analysis or Property, Plant and Equipment 49 

Appendix D: Segmental Statement of Financial Performance 60 


\ 


~>f\ Q 



ILEMBE DISTRICT MUNICIPALITY AND ITS CONTROLLED ENTITY 
STATEMENT OF FINANCIAL POSITION 
As at SO Juno 2019 


ASSETS 

Currant Amts 

Cash and cash equivalents 

Current twin Investments 

Trade and other rooatarbies from exchange trertst 

Trade and other receivables from non exchange ti 

Inventories 

Toul currant assets 


Non-currant easts 
Non-current reoatablae 
Long term fovestmenta 
Other rton-current finance I amts 
Proper^, plant and equipment 
rntengbto assets 
Heritage Amts 
Biologies) amts 
Total non-currant amts 

Total assets 



GROUP 

row 

GROUP 

jpi 

Not* 

2019 

2019 

2010 

2019 


R 

R 


R 


3 

104932164 

174 702701 

75 613667 

TO 703 174 

6 

28 719789 

23 710789 


2 

4 

124987813 

116313 321 

100 732 266 

100 745 782 

e 

11 533 993 

11200313 

6200327 

7917309 


380 07354 

33-1 028 215 

180746261 

1783052B4 


7 

528 084 

628 084 

810 990 

619 999 

8 


- 

27286420 

27288420 

5 

* 

100 


100 

10 

2 532502 956 

2 604242 757 

2 398 768 773 

2 374079577 

12 

6094145 

6 094146 

5 247208 

6247208 

11 

206 673 

205578 

206 678 

205 676 

13 

590000 


301400 



2549010 783 

2511070 864 

' 2 432 709 388 

2408 238 691 


- 

2900 034 323 

2642 096679 


Tw»nr 


LIABILITIES 
Currant UabMties 

Trade and other payables from exchange transact 
Trade and other payables from non-exchange ire 
Current portion of borrowing* 

Currant portion of finance lease ItaHAy 
Currant portion of employee benefits 
Total currant currant lEsbftftfee 

Non-current debilities 
Non-ament borrowings 
Non-current finance lease natality 
Employee benefits 
Total mo-currant liabilities 


Total liabilities 

Netsessta 

MET ASSETS 
I Accumulated surplus 

Total not assets 


14 

16 

16 

17 

39 _ 

250 014 025 
90221432 

37 342 623 
2785 835 
1494 983 

247 564 531 

76 719066 

37 342 526 
1867 971 
1494 983 

241 290551 
16611222 
7164 483 
1068 697 
739 456 

237 836 209 
16 778 653 
7164 48$ 
1088 697 
739 456 


388488 901 

944 489 834 

208894409 

252 407 698 

16 

38226410 

36226418 

72 851 417 

72 851 417 

17 

1475 734 

314 989 

2162 960 

2182 960 

36 

10592 237 

10592 237 

8 767361 

8 787 361 


50294 387 

49 133642 

*3621 738 

63 821 738 


■w 

436759 288 

414123344 

55571314* - 

344 229 438 



2461334 035 

2 427 973 639 

2 272739 621 

2241375 724 


2461 331 035 

2427973539 

2272739521 

2241 375 724 

2461331 035 


Tjrnsrsn— 

2241 375 724” 



ILEMBE DI8TRJCT MUN1CIPAUTY AND ITS CONTROLLED ENTITY 
STATEMENT OF FINANCIAL PERFORMANCE 
For Em pvriod inW 90 Jum 201 B 


Revamia front exchange brrn«»ctlon* 

Swvtoe charges 

Rc of fecflfles and equipment 
Interest earned - external Investments 
Interest waned - outstanding receivables 
Fhes end Penalties 
Site of produce 
Other InoDiae 

Revenue tern iu>n exchange tnnncffoni 
Government grants and subsidies 

Total revenue 

Expanses 

Employes related costs 
Remuneration of oountiBors 
Bad debts 

Director*' ettsndanoe feet 

Depredation, impairment and amortisation m 

Finance coats 

Bulk purchases 

Contracted services 

General expenses 

Total expanses 


Gain / {loss} on tala of assets 
Fbraxgaln^toas) 


Nets 


18 

10 

20 

21 

23,2 

23/ 

23 


22 


24 

25 
2 
25 
28 

27 

28 
20 
31 


23,3 

30,10 


GROUP 

IDU 

GROUP 

PM 

2019 

2019 

2010 

2018 


R 


R 

221 387284 

107773310 

~TB®a- 

f53102 746 

183 140816 

153140616 

130251315 

130251 316 

107037 

22 889 

75783 

9676 

13 104782 

12284 045 

8358530 

6086 492 

25 788665 

25 708086 

15462338 

15452 338 

175076 

178075 

380438 

380 438 

21 371 976 

S 

18031479 


7686092 

6381208 

6332368 

6022486 

807242194 

700 111 215 

809 273 728 

808 307 400 

I 607 242194 1 

790111215 

80S 273 7281 

808 307400 J 

-J -Lilli ■ ■ ... - - 


"WWiM "' tmaw" ommg 


220237200 

8003847 

85022454 

080017 

100437807 

8164824 

150878471 

144 074148 
120211508 

202180059 
8609647 
05022 454 

a 

104320755 
8154624 
150578471 
110310 073 
138100670 

201322368 
6400692 
41676 124 
550868 

92 688161 

10 565607 
66505612 
139 860906 
105 746092 

188085671 

B 408 602 
41878124 

* 

01780600 
10585607 
88805612 
123 230200.40 
122374770 

833 878 687 

704208162 

677 60S 820 

Sills 374 

(8188121) 

(72650) 

(6 916518) 

(72 550} 

(390534) 

(351 080) 

183 488900 


112160 EG? 

—554844782 


» 


1 



ILEUBE DISTRICT MUMCIPAUTY AND ITS CONTROLLED ENTITY 
STATEMCNT OP CHANGES IN NET ASSETS 
Porlhe period ended 30 Juno sms 


GROUP 


loin Accumulated 


SUrpluaRtMlott) 
and Total 


SinptuaflDeftefi) 

Total 


Batanoe at I July 2017 
Prior year adjustment* 
Prior year adjustment* 

Restated balance 


Net gain* and Josses not recognised hi tfie atom ent of financial performance 
Transfers to /from accumulated surpfua/fdefldt) 

Surplus / (deficit) tor the period 
Balance at 30 June 2010, u previously rsportad 


2~ltt2S42tt 

2T04S12W 

<75872486) 

{76312120) 

(98188888) 

{86444107) 

1099224086 

1031756620 

erlbrmano* 

. 

f 1363877 

74380 

1 312180002 

300544762 


Opening Balance, 1 Ju|y 2010 


2 272 729 322 


2241 370 724 


NW gains and loose* not recognised In the statement of financial performance 
Transfers to t from accumulated eurplus^dellcft) ^22 601 


Surplus / (deficit) tor the period 
Balance at SO June 2019 


166460 900 

Tjgrssnsr 


106597298 

~n»w »b 


7 






tLEMA£ DISTRICT MUNICIPALITY AND ITS CONTROLLED ENTITY 
CASH FLOW STATEMENT 
Per Si* parted ended SO June 2019 


Note 


Receipts 

Sates pf geode end mMom 
G ranls 

Payment* 

Employ*© oost* 

Suppler* 

CASH GENERATED FROM OPERATIONS 33 

Merest reoetod 
Interest paid 

Nat oath flows from operating ectMtlee 

CASH FLOWS FROM INVESTING ACTIVITIES 
Purchase oftoed asset* (PPE) 

Proceeds from eel* of fixed eesete 
tocmaee to tavertnenfo 
Norwjunant moetabfos 
Purchase of tntaitfbtea 
Cteoreaaa/Ksierwe) in Loons and rscofvablee 

Net cash flows from Investing activates 

CASH FLOWS FROM FINANCING ACTIVITIES 
Repayment of borrowings 
Repayment of finance tease liability 
Net cash flow* team flnenejAg sctfvttJes 

Net Increase / (decrease) to net cash and cash equivalents 
Net cash and cash equivalents at baginning of period 
Net cash end cash equivalents et end of period 34 


<3 ROUP 

IDM 

GROUP 

IDM 

2019 

2D19 

2011 

2018 

R 

R 

R 

R 



Rtsfditf 

Resisted 

^"037242672 

1 Q±Z350B76 

” 968 037 336 

441101 819 

198300810 

156299627 

132629088 

115 808696 

698 941 861 

887 051 049 

838228250 

833498121 

imMoM 

PffMjlWW 


— Bsnsror 

227 813 367 

20975§207 

208372989 

Tsraear 

609862740 

569564 30B 

320343346 

314522454 

269 788 676 

243 000161 

“'Tsrsiroor 

440783074 

131M>i2 

12 264 045 

8360639 

6088492 

(8164624) 

(8164024) 

(10555607) 

(10665607) 

264 718733 

MMM484 

437 134133 

-asaeofl 


(214209060) (216356970) £336 609 797) (338 468 276) 

(7348 439) (1433360) (1476 657) (1478 667) 

89306611 89306611 

(3111067) £3111087) (196 800) (198800) 



119113497 
76 8 13867 
“W93IW 


103999 617 69518067 64936661 

m Tiara __ ? Q7M 174 




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NJWBfc Dvmcr KUMCtflALffy AND ITS COKTRCLLEO EKTTTf 
NDtES TO THE PMAKCIAL0TAT3 IKMTB 
A**#] Jtt»« 9 l 9 


TfUDB AND OTHER RECEIVABLES 
2 FROM EJCCHAWE TUMflACTIOllfi 


PrautatonferOad 


MdlVAnSOfl 
Santa dittos 

water aid saMngi 
MHtM 
Trfal 


Uomotoweiar debtor 
DepOriftOnteT Education 
Accudlritrat 
Btrabe EntorpHe* 
Odwmdtng ipcens 


OCwAttOri 
ftDCbsquse 
VU receivable 


VAT It p^iNi on tfw msfpta bud. VAT to 
peW wwtoSAftSodysnco paymondb 
rsotavadfrocn debtor* 
TtttoTVedeandctharraeefAbb* 

toMtoJmwm* 

FVWhhVO 

8«tibe debtor* 

WStar <ad Swraapa 
Direct DepaeBa 
Total 


Grate Bslaneaa 
A 

dabfie 

Nat blraa 

toy icisi 

350 732 611 

(800 206 *»> 

100 487801 

_ (01804) 

1M llhlVT 


8M78S3 

3082718 

*0 

314215 

s- 

8 

* 

1647683 

2082718 

4 

314215 

2602715 

671751 

314215 

13143320 

3480 


13149 730 
3480 

13846671 

3480 


• 

i*4ftl19 





273 390340 
010 


(106 409 010) 


00 007830 

m 


60007 930 

SW 


lAnnoWi water (talar 
IfcpataiaiQfEducstta 
Accrued Was* 
OuttMngdfpoete 
StfidryDeto* 

RD Cheque* 

•wtfy Ditto* * f/W Expatflura 
CHttarMttta 

ActowriMbomwit Or Mb 


Other raceMMrte 
Total Trade end other reoetobta 

flummery of Debtor* b» Cuato marCtoeeH 


Aa si 30 Am* 2919 
Cunrtra-3 
31*000 
01 -60 Day* 

61 - 12 QD** 

1*1 -385 Days 
4 3050*1 

StaHubl 

LeeerProrttor ferdoubdU tfotto 
Total darters by caatemer obselNosttai 


Ai 39 Am 2010 


Curart(p-30d*i) 
31 *00 D** 
51-000** 
01-1300** 

131-386 Days 
4 946 Dap 


5325301 

740373 

2673133 

■ 

6320 381 
749373 
2073133 

749373 

2073136 

78B04 

14846164 

-70804 
(0 177840) 

6871346 

8359941 

- 


5016941 

4070100 

srwwfT 

T...MMWI 

815»W6 

ttm-m 


WM 68 W 1 . HwW^" WTam « 0 T 4 i 7 BT 
Residential MatrisMCoinme NattaraUnf 



ratal 

pmfncu 



Government 

A 

B 

ft 

28786945 

3498073 

4807 527 

1094042 

800402 

028 384 

10738671 

336180 

1057048 

11783 787 

373127 

65)700 

14188382 

207480 

071308 


2728664 

. 11000411 

317102414 

f&m 

nn^ 


re «7 0861 

ftpaaom 

_ wwH» 

new 



Uto Prtwbta for dorttfcd debt 
Total (tatara bye 


0347 OH 

1072208 

2979188 

17180270 

481 381 

1319814 

10 128 801 

188802 

1030200 

6401873 

137480 

725134 

18584214 

08 012 

802 944 

wwpj 

.i®og 

.10 360717 

m tmm 


arflHH 

(2 9588501 

_(14630921) 





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^fiSAasAAcoaunf * DutUn Bmtieh 

Coh took bttMt <1 bacfnnho af par 
Cart book brtncait and cf par 

Brtk Mteiwd balanea at bartwhQ of ym 
BankottraantlMliMft and of war 
ItthrtnlftnXtowiad 

Ml***/ Mt*CfPten AM 
Awtaif CrtMtAxoutf 

Cartbortbtf*n««tbaattrftgofjaar 
Cash book Mite* «t and of par 

Bai* Mmanl baJMo* it b«Mki< of v««r 
Sank atatanam bafcncaatand of par 



ArtfentManbarft . !!lf«:CwwU>tooun# 
Cohbo tqliwlhgcfiar 

Mi book btiamit aid of war 

9vk m utrni britaoa itbagbuihg of w 
B»* atofvnant bHanoa ti and of par 



mNUMof M-ftrian Aivk 
AnouHHuMm 040806670 :Cmnt Aceounf 
cartbortbaJ^abachn^i/par 
Cart book baton* at and of p« 

Mrt mwlbabrx* it batfhnfco of wr 
Bank atortrwtf Mm at and of par 



M/MM Bank-DuteAaiM 
JcnurtMartar HMflOTOMf -Cttrwtf Acou* 

Cart book baton at bagfrartg ef par 
Cart bock baton m and of pv 
MaWaawntbMneaatbMMnoof par 
Bart mm&mttemM and of war 
MrBrtTMn 


44 Fit 4400 44570 440ft 



« OM 

IB 141 

24 DU 

16)4! 

24 006 

MOM 

2401 

2406 

1 M3162 

200110 

10)10 

100 

10)10 

65»70 

16)3162 

16B301 

MIU 

169621 

601)44 

11947670) 
103 HI 

(164767*1 

1663 621 

16R1» 

61)044 

1672176 

01)044 

32606 

1572976 

32906 

iKf2in 

20 746682 
11)01X14 

20744 M2 

11 391114 

160472 

0740 OH 

1809472 

070)0 

20 TV 1)9 
11412X06 

20760130 

114421M 

1093074 

20IM1H 

112)174 

01010 

14666407 

2)211410 

1406407 

2321)40 

1243847 

14000407 

124)347 

000467 

12 M3 Ml 

201M 3» 

12003661 

20 in no 

414043 

120001 

414 Ml 
13 OH 111 

TOAST 

7467*1 

TO 437 

746 70 

Dt 

7)437 

O' 

TOUT 

8 s 
39 

««0B 

943TOI 

81 

006 

81 

MOM 


i 

a 

I 

i 





IEHBE Mtntfcr If UN I ND l» Gmmte2£& JtMTTTY 

•Wfl* TO n« FWANCMLV1ATCMEMT8 
AntUJuniWI 


2919 

R 


R 

BBUffrtw iwiba HoeaMai * That Rank Aeeoont 

M Nriand Art Aecouni- Mb* tan* 

Aoooont tartar 923478134M -CwiMMAwi 


Ctabrtbatonoaatbntafap'/yasr 206218 

(tab Art katana Hand dja* 204 m 

Art ftltaqRObrtiaaftbidnaftiodyMr 209219 

OrtifelMafdMtaotttanddyv* 264^73 


GROUP KM 

Wl 1818 

R ft 


209210 

20921ft 

203218 

205211 



MftWbMMJUCMiif- 

Aeoowd Matdar 89460074077: cna*w 

Amrt 


Caaft brtftatan at brtvrt d yoar 

91 

M2IS 

Ort bop* batons# at andrfywr 

2109886 

91 

fiat* afctonwrt baton* tibatataOd par 

81 

806223 

Art tiatawit batata at aorf djiaar 

2808966 

FI 

CdporrtCft#4uMceDud 


Grt bocktatanosat td M*ioaT 9ia vav 

Cash book batata at Ow and oT tharranCh 

B AD9D93 


BanktW»MMancaMtttb*tfrt«ofte»«ar 

M imUtuMritiiinMIi 

9809093 




taawUttwta WDOftWH * CMAowl 


c*ih boon batata ti baduting d par 
caahbMkbataoadtnddyaar 
RankatdvwitbataQaifbagtankiQd** 
Bank iMsmam Wtaot d and of war 



Amur* tartr 911494125B : CRT 
Mount 


MttMbiftnoftit 1 m bagttog 

nfftayaar 

Art rtfrrmm bataca at f» and of 9m 



1 m 9m batata 


dtayaar 

Art aftamant baAnoa at 9m and rffca 

irt 



Axwnr Mrtr 8Z77944P9BS : Cut 
Aaovrt 


Art atttaan t batata at ta bag**? 
dv»>av 

Art tataant baianco at m and d na 


18111 

•en 

0 

18 HI 

18111 

8908 

0 

18111 


831 

831 

1184 

1134 

m 

838 

W 

111 


888205? 9342057 

I8H8S44 >B 811243 6592897 • HI 997 


42X0985 48X0*81 


Xxouti Mtawr 81089087 m * CM 


oftoyaar 
Art tatamt balm at t* rt due 



4flJ(W Manta 00773447726 : C98 
A iCW l I 


8009881 1888881 

804*844 8044844 8888404 4 888 881 


Art dtanam btarca d 8*4 batata 
dtajMr 

Art titan** bataoa at te am or t» 

’**' i> HI Jit 


99 Q 



“WWTlf AMD IftCONTROllJEDBniTY 
NOTES TO 7KB FHANGIN. VTATEKCNTB 
A»t1UJw»20ta 

CWOBP CM GROUP c« 

ins m* mt * ot« 

R » R R 



930 



3 BFnrrv 

ftmcsToitanuHeuLnAiCMEmi 

MvMBJmltW 


Brwxft 

Aaaotffd Namb* 67750061740 : Of 


Bank itetunt Mm* «t *M bMH* 
offto w 

Bn* Mmol Mm* «t tort of to 


Account winter «nMi« • car 


BM totesm Mm «t» tag»*a 
CffMJMT 

M tMmnt bUtu» « «w md of to 


■ Mm 


- . (INVESTED 

/*10MlSS774ff3|bCW Acmtf 

Mt atofatwnt tanrw* it tw btdMta 
offw |W 

te* flWMMrt Mane* it A» and a 0 * 


> CwfiM 


^oawf Numb* *277346136$ : CM 
Afiounf 

MttMmimbitanMtf auendcftf* 


IwaaftnutC**—»# 

Am* M6ar 8270607*200 : CM 

Account 

Me thtmnc M it tw up** 

crttwyw 

M itatMMnt Mm m bm ml of tha 


MV rfWVESTEC A4W 

Mt IJM tefanoa « M batf** 
MB fttomeit bM si ft* and crtha 


Adceu* Numb* *2313662X9 : CM 

ACCOU* 

g Wim i rt Mnot at t» 
dtaMr 

M MM Wnoi at 9m ml of the 


Maomt MiMht 62373449929 : CM 


flank tfMmL Mm at ha bM 

oftwyiar 

ear* MnjMt tttknc* « t» and of to 


Mffrtttfbt 
Cnh book bataa at b«gM« of w* 
Mi boofcbakneaa end of jw 
tok Mmavl Mi at f» to*** 
Bm* iM baton at ft# tna of tha 


fOft 

It 


«io 

it 


R 


f4 807001 
23723 


uwrrai 

32721 


14007 on 


14089001 


072M 


0704 


Ort ooo 


070 OK 


moas 


on no 


24050803 21 000112 


1474702 1474701 


1122021 


1 100022 
00170071 


1122421 


1 100022 
00470871 


2011007 

HOIK* 


2011007 
mi on 


1417 8*1417 


1003 710 


1000710 


looi no 


1003718 


Aioountl0anbflr74707n8l81 n^HtturilyNoOba 
Mi be* bonne* «t tooM« 

Mi taktakm Mend of pm 


1000 ODD 


1000 000 




i 





k* 1 * 8 * ^ ^^tPAi-ny *np ro cowTHAmp emttiy 

xoro to me fwwcim. wtxmmn* 

feitlOJMttfS 


tiatemnttatanfiv «ib^irtno of y«ar 
Bank rtstonanttolninti and cfjMr 



Ort bode baton* it to&rtaq of per 
Cnh book Mmea at and of yaw 
awk (ton wit baton* ct batfvAv of yaw 
Bmk totowam baton* at «rf of yter 


CROUP fill 

m* till 

■ It 

IQQQIQO 


loom 


GROUP 


m 

R 


tDH 


tot* 

it 


1K90C0 


turn 

m* tot 


939 



■ HUNKIMLJ1Y AND FIB O0WROUO DOTTY 

MOtBSTOTHBnNANCULtTXmiEim 


«rt 

R 


GROUP 
m i 

It 


soil 

R 


M1OOM9M0M Bu**»7*>G 
Call) to* Manor «lbo0p*igcryHr 3079499 

On* book Mine* aUntf of par 

201149* 

Bwft iWmu baton at antf of 

ItM favtftu -OiRtn Difc* Brunt) 
texxH tomb* IICOHWSOQBitt*** Tw* 

Gnfi book bat* cs it ft* #M Of hoy** fittlfM 

B^atMHmfltMmatA»bioln*vdiriByw 

DiiA Datamini btoncaol to ond of toper f 051 as* 


7V714M 


tmm 


12A-? Ftat NifloMl Bank Account. 

Button tovn tewU D—k Bunch 
Anoci*Mtfs*r *20080*409 

C**h took baton at to bttfhfeu of to ymr 
to*bookMfcne«9tfe«ndofto»* 

fitftttftomtobtoroaltobotftojoTtovw 
Bv* miM kotow* tonrtrfto par 


9SUB34 

(Shim 


1UJ M Nttbfioi Ban* Aeeooiti * 

Bwtnosa kivttttiort D*sk Bnncti 
Account ton** GzmMfttf 

GtobookMrn* totMtogoftoyo* 
Crt book btftno* a! to mf of to par 

ttoktiltoiontl ^oottoMtottOftopar 
Bmk itHsmarl bohra* at Its and of to p* 


tonne 

fount 


rwr cwt> tog am on mm 

4471* 

44 no 

44970 

440*0 

ioWbnrfftmttH 

ratatn 

i» turn 

9IN01 

umtH 

flwtmMitniMiaa 

44057477 

If 713 fill 

1? in mi 

173919*7 

Caob book baton «1 batfrtflho of par 

97611494 

97406916 

1194913 

1*62001 

Mtoek baUno A par and 

44mm 

3i trim 

37 HI 404 

9741*913 


4 TMtX AND OTHER fcECEIVASLES FROM NOIMtCMIfOE TRANSACTIONS 
TbMOtorMtam — '-;—— 


9 GTraftMOHGtM&NTFWMICIALAStBTS 
hvwmrtthrrurfdptlar*^ 

Itfetfttfl 

Orth*y thane loo o fti «tsh 

IJHVCNTOtffit 
Ofivtaa Mm of friratarta 


J*L 


K4» 


RwooMto 

OonaumtUiGorBi 


iBlBT i t 





*nwr» k no ftwiuy ptopd bo a Manly tv fcbOfe 


nr. m m m 


mmi _ l^tmi 


J3L 



933 



ILiMBE DlSTROT IfUMCfMUTY AttO ITS COtfnWUJBD OfTTTT 
WnSTQTHB nHAHCULSTSTDIDlTS 


rnoM^uiusirrRecQvwuB 

Stiff tavtt 

CowciOf A fturrfmtn Gritty OMrewnunt 
Li tarbstfdtt* 


Thaw toimm « nnitor bimtlM 
frctrtih tfif wmvlb tn is pvt 
«f* batmy^ipnMppiMtf bycwnrt 
in pnvton firttndft) vwi. 


ADBAanqgpgntniltWll 

LfinffTbnnliiMnM 

cmmtTmmtmatm 


ww iwrowninM wi oa mt m 

MouiQrtsM flit tac twm bvt fan 
AS0Aflhdav«dbiN0»1& 
TT»tonnofh»rttmrt wxfc fc Mr? 2009 
MS I wO t» UfflMd to MSI f» JtfigA 

Lwn w NoteW. 


514 






T 

| 


93R 



gii!Ha|Sg2BiiiilS8BS»agSIS!8R9i8 

.....A,,,...... 


9 

i 

I 










737 








JLEftflBE DISTRICT MUNICIPALITY AMD ITS CONTROLLED ENTITY 
NOTES TOTHS FINANCIAL STATEMENTS 
A* at 30 June 2019 


11 HERfTAOE ASSETS 

11.1 Recencltfatfon of carrying value 


As ell July 2018 
Cost 

Accumulated ftnpasmant bam 


As at SO June 2019 
Cost 

Accumulated Impairment tee** 


H*2 Reconciliation of carrying value 


As at 1 July 2017 
Cost 

Accumulated Im payment losses 


As at SO June 2010 
Cost 

Accumulated fmpabmam losses 


Moveable Objicto Total IDM Total 



R 

R 

mm 

205576 

205 573 

205578 

265 aw j 

205 678 

205 575 

__ _ 205 578 

205 878 

206578 

205 576 

£05578 

Moveable Object* 

Total 


R 

R 


205 575 

205 576 

205 57ft 

205 678 

206 578 

205 578 

205 578 

206 570 

205 378 

£06676 

205 57S 

205 570 


- 

- 



u 


Tin 




tLEMBE DISTRICT MUNICIPALITY AND ITS CONTROLLED ENTITY 
NOTES TO THE FINANCIAL STATEMENTS 
As at SO June 2019 


12 INTANGIBLE ASSETS 
12 RacencUfsflfon of canyfag value 


As at 1 July 2015 "Restated 
Cost 

Prior year error 
Accumulated ermortteaflon end Impairment to*4 


Acquisitions 
Other Movements 
Amortisation 

Cerrytno value of disposals 
Cost 

Accumulated amortisation 

Impafmwnl kwG/Reveraal of taipabment loos 

Transfers 

Other movements 


Aa at 20 Juno 2010 

Cost 

Accumulated amortisation and taipalrment 


Licenses 

Computer 

Software 

R 

Total 

R 

DM Total 


>051344 

5247206 

5247205 

r 

rssf Hi 

14435139) 

5 005077 
355015' 
(2757) 
(2690191) 

12039678 
3S5616 
£2757) 
(7125 330) 

— 

335615 
-2 757 
(7125 329) 


3 111 057 

* 

3111087 

3111087 

(072095) 

(1278521) 

(2 260 916) 

(2260 910) 

__ im 

(13210) 

_ (13 S3S) 

(132331 

(49212) 

49190 

(27903) 

14892 

{77H*J 

03882 

<77115) 
53882 


- 

♦ 

- 

■ 

3734831 

2359313 

__ 8 094146 

6094145 

9 092 878 
(5 350 045) 

8316389 
_0967076) 

is3tf as 

(9315 121) 

(9315120) 


12 RaconcHIatbn of carrying value 


As at 1 July 20IT 
Cost 

Prior year error (note 32) 

Accumulated amortisation and Impairment k«J 


Acquisitions 
Other Movements 
Amortisation 

Carrying value of disposals 
Cost 

Accumulated amortisation 


As at so Juno 2010 
Cost 

Accumulated amortisation end Impairment Jcse[ 


Licenses 

R 


S 107 101 


Computer 

Ifw 
R 

3 320513 


Total 

R 


IDM Total 
R 

Restated 


6 675768 TWIST" 

•1 811401.99 

2 961 85524 
(3415508) (5678 838) 

'■"W4i46tf| 
-1811402 
2961968 
(9097545)1 

-1811 402 
2961858 
(9 870 765) 


196 800 

" 

196 800 

ionw 

(1 758 063) 

(1472) 

M 769565) 

(1758 083) 

(8) 

555 

547 

(6)1 

(74l 658) 

1 741 551 

28818 

(28261) 

(712 743) 
713289 

-741 659 
741 651 1 

1595 881 

3 31B 436 

491434945 

4814348 


8008677 

(2800181) 

12039676 
(7125 330) 

_ (2 039 579 
(7125329) 







ttJane AND TOammiouBD dotty 

WOTEB TO THE FINANCIAL STATEMENTS 
At St 99 Jim 3ns 


19 BIOLOGICAL ASSETS 
11.1 Rtooacfftallotttf t*rrytaav*lus 


AsttiAdyaMs-iiftflUsd 

Coct 

^^TUJhtwl troorttestta) fiftd taptfrment losses 

Gsta on tair vitas 
Amorttarton 
As it 90 Jutm 8019 

Cost 

AwmuWdimorti^ 


MOffltBS 

PtantatiM 



Total tDM Total 

R R 


IflBflOO 

J-11 OlOOWM 

109000 

'l _ 

1—- ,j»ooo 

680000 


I i7ioo3B1 

rmrwr 

1- r~ 

-1- 0 180 00011 

L_ niiooooi 

1_L 


1U RscondOatfon vf csnyftif volus 


As *1 July 8017 
Cost 

Aocumitatod smoritaotlon find (mpstfraant teats 

Galnonfcirvtte 

Amortisation 

Csnylng wtaBofditpoMifl 
Coat 

AeonutataOsmoriMton 

JnipBfrmttalMdRsvifMdtf 

Tnmtarf 

Other movements 


Horingt 

Ftantaffon 

Bfofoflcal 

Amts 

It 

mm 

Total 

R 

»DMo 

DM Total 

R 


1710000 

03200001 

IVioSft 

I 113200001 

I - : 1 


IKK) 

1400 



“ 

- 



+ 

„ 



' .J 

- 



Asst 3d Arne 2016 

Cod 

Accufmtated amorfinflor) and t/npsfcmsiu Inset 


0 

17toOM 

1710 000 


0 

11 316 6001 

11313 600} 



» 


JdO 




IBIU O STRICT MMCVAUTT ANDII* CONIROUED ENTITY 
NOT** TO THE HMAMCULrTATlMiorri 
for *i gifted niM ll Aina IMI 


« TRAM AND ODM PAYABLE* FROM WCHANOE TRANSACTION!* 
TVada cradhora 


PmWon and (mpafrn antUn mrt Capttal UNI Cturoaa 

O utNa ntffiq Pj 
ROChaquaa 


tNiDwwi 

V*pi)nHi 


1hakbvib*a4lfadaindo*itrp« 


a tha* «rri4na anew*. 


GROUP 

urn 

GROW 

torn 

2H* 

2010 

2811 

181* 

R 

n 

R 

R 



ftaatatad 

******* 

2**3* 102 

78 127225 

TO 200 4S4 

7*601*07 

1000*301 

10004281 

7604681 

7604511 

44W9 302 



040 0*0 

4S 986902 

99680 089 

396800*0 

16 40*029 

14 056 759 

ism {to* 

198*0068 

t* m 

01 160 

04 000 

640*0 

42 150 

42160 

42160 

42 160 

99 010 70S 

4*900 307 

67120454 

67 136454 

2*022 707 

28 421880 

58288724 

97 097821 

* 974 *10 

8 974816 

52*1*98 

6261051 

537B 401 

6678401 

8477023 

9 240T49 

-12 009474.77 

_!«2«50 



— 

2476*401 

241200*81 

297 «U 200 


OCBCRPnON 

AMOUNT 

Cm—nl Walar 1 Spring Qrava Dam Capital Urdl Charaaa 1CUC1 

49 51510.1} 

Tfcta k a HatorleN maltor *A«t* Urnrieanl Mbr aancifirad aorvOucfafl ef apt? paw dan of atoMha 
oonalruedon ooak Mnra to ba aharad amongal It* dSanta btaad onthaprincqdaerffawaubNdaNbrL ionba 
aiunkdpMty pmAuMly Aputad H* eharga on lha bade lhal tiara waa no £r*d fcanatt allnea to 
aohana In ^laaOon dd not laad to dia Bwt wpptytng «Mtar to Aa dalAct Tha !na*vhad bwi rabrrad to 

SALDA far nadadon and BAL9A raeonirandad tiat a* the ai jn&pal?** bandldno to Umnoani Mtor 
daotoiifcr *>*kn aPoUd oorWfbuta [beead «tna um itiaWimlcn prtodpf*} Iwwda Aa cshOucIvy miU 
of Via apring jwi dam bit bafora <Se4r* to. Miptiirail nuat baantarad Mvuoan tie too ptrfti Baaad t** 
0ALGAY raeawtortoador. ILwrba dalHet Mu^kal Caad haa HibaaqwnOr nidMad tie payout mnl 
daeklan not to certoibula. In iwdncSra Wa dec'tfcm, Oia aooouiino ofioar mat iwi nandal«f to fartUato 
aigntop el agraamard aflh Cngad walar Mich alwAf Ua Jrda c«*W*ra<cn rvwnjrg ft. pwteia dtotgaa. 
toenporaAt* peymanto pra^Wy mad* and datormUng Aa bbr* paynwd ptn At Aa tone of porn j*iq 
eampiaionatTnaanrui Anandal atalanw'a Aaaiattr m*«Q tmdard’acwNm^ftUao^l HitorVUvn* 
d Irdhtofl Aa aoraaman*. 


Pmlabn baaad an Umpanl Watar dabna aobmittad up to 34 Jlma 

2010 

ons3u.ii 


1* TRADE MID OTHER PAYABLE* PAOM HOHEXCHANOE TRANSACTION* 

Urtopeid CandUaml Onnti and Rapetpk 
M^TwrAbEdAilthiiiinl 
W*r StnloM Infratfrudiaa Grant 
RB,*G 

UtitScifcp Grant 
UP (bant 
SASAOrart 
COOTA RASET Grant 
COOTA BK3MAS* Grant 
GQGTA YB> Onrt 
COQTA FUSaWt R Or«d 
COOTA Wrt Faakriec Oram 
Mtphunuto 1 EC Orant 

OHrlrf Otowth and Otwkp n anl Surrnk - 301* 

Tatal Unspent CendlUaiul Granto and Resa^fe 

Man cwfard impiAl eonditiwiil sianta and rtaalpto 
Currant patten of mapcaf candWanal pnnto and raoetota 


*h Ifata 32 M r^mcia'iDn of pranU and raoatoUt TlMta An cunti ara ^vaNae 

10 BOnKWTWW 

Peiafapa u rt Bank of Baton Akfc* 

AfiSA 


Lae*: Currant pMkn IniaNmd to autrato JEaWttfea 

Owafocnerl Bank of Sato* Afciea 

AB3A 

Hm curranl pwtkm of barrowin^ 

Oswfapmemt Bank ad tptoti Africa 


1200 000 

l 200 000 

1 300000 

19*000 

61924 000 

61924600 



21984 401 

21984401 

14 670 009 

14670053 

*90507 

9971606 

090607 



22 224 




9 760 787 
1061 52* 

744 094 

1 917 887 

2 179 015 


700000 


W 999 _ 


191 500 



f»OT.4«. 7* 710 088 

1*411942- 

18 77*004 

00121492 1*770399 

cad ntaatmanl uVR uL-aad. 

1*011122 

Itm 069 


44 772 980 

30 700 302 

44 772389 

30 TOO 562 

40 210 93* 
30790 402 

« 2*0 ua 

90704 642 

76««« 042 

76 930 ?5 

H 016 080 

•0 019 900 

IT 342 920 

37 942310 

7 104 400 

7 104419 

30 700 602 1 

B646 5HT^ 
30 70*502 1 

T W463 | 

7 -04*+j. | 

" 

30 22*411 

39 21* 41* 

T2 031 417 

72 361 417 


Baar kinraat at mtot bntwaan *03% and 11.C*H pararvua and are rppaHtfe a*wr ala mar** wMi frekat topwynm* fee on 20 Sapter bar 2025. 


Baara InMraal at UJ.OUpere'iriton, fefcreat k paid queried* and the ben la rape*)*# in M2& 
Mr to AppardU Afar man data! on borrofftaa. 

Tha rrud^iaCty cwwdy haa a lean cwnnukr aid toth ABBA araqmCpg to RXtoOon 
■MCI *ffk aa A May 2020. Tha ban la aaaaad by a aMdro fcrd towttot enl to A ABSA 
amn*y valued at R20.7 mScm tow* appear* Zara Coupon inwafcnent an Mala * 


17.1 FINANCE LEASE UAOUTY 

For till period toM *0 Ah Rif 
Amount* parable wider finance looaoa 


Futura finance 
ohargea 
ft 


Prveant value 

laaaa paywtnb 
R 


Wbtfn one year 
WWdn tw to Kw vaar* 

Law: Amount due far aeUenenl WAto *2 itondw (currant cordon! 


BWdm Laaaa payment* 

CapMal anavni Mthin ana year 
Ca0M an auto MMi one year 


TOM 21953 

hm : 


3463 3g 


»JTOS 1} W \ 967 9 7' 

22 522 _ M 803 _ 3HtM 

a pswi ~~ W * mz naiodo 

1 947071 


CROUP 

KW 

CROUP 

!0M 

t 3 794 036 I 

1 *47 071 

607 471 1 

*07 471 ] 

E 1476 734 1 

3140*0 

13.426 648 1 

13428 344 1 

_«»■*> 

2 102 9*0 

14 194910 

UiUM 


Tin laataa ara br mpaAan aq^rml ttiM ara uCM In tfia aouraa of parfcnrlng Sia MutMptfly'a powara and bnc*cr«. 

CompWare*4ir.*ntlaeaae to* far three yeara. TheMnatieto elwgad la Inftad toAeptfmarafe. ThatamlraSsn data la 90 Saptanbv’2020. Tralaaaaa ararapod monddy 
and IrcttdO auudananoa and ■new*** At bnalnadM at in* eetee To corputor equipment raw* to ttekaeer 

THa Er*^ taam ha natef whietaa «d*v Arfa m do# la l-a HAatanea al ftaaa apwianU *«r va and dUdaaad aa flnansaiaaiab Tha mom tana I* M won»a 

and lha totonac rala 1*1 pAilt on *io aoraarnar( to ^OASR par awnK Intarwt rata* ara o^anLyaanddarad to do ftaad at tw aantraet data tfwi ba nhao id dw apraanwH. M 

laaaal 'tow fod repajnwk. 


Tho Enity kata* ili motor vaPtotaa *8h Atria and tore to Aa Hdutano* al theta agreanienk, they at* raeagnfaad ard diacfaeed aa Inanea knee, Tha laaaa am la 30 awnfo 
and ilia intoaal rata ftafrtfefc on Ihe agraamonl la 0.0*6% par cwntL idaraNratoa irapanMtVeanfldaradlobofbtod atfcacato/aadtoafw eantra of «aivwi«i M 
Mcaa* haw bad rapajm ante. 


HdMJnntl 


WJMionavaar 
WtMn Ina to Hva wan 
Adluftnant 

U»« Aaauniduafcr aatdamant «W*i 12 nocidu leurod potfonl 


paynaid 

27*0200 

340*333 


Futur* finance 
■liataaa 

R 

l 112 WO 
579 031 _ 

Fltto* ftrHTHi 

«har*«a 

R 

557 564 
500 442 

Prater* vadua 
af BiWiian 
laaaa pojmanto 

R 

1 C80 0O7 

2 162 098 

_ _ 

* 

1 009 870 

1 257 207 

3Wb57~ 

2 750 700146 


ttl 730 

-BTmT^ 

_tpftir 

21*2 004 


Tha haaaa ara lor a wtaty of notar wNcfaa and eem|vtari aoipraard H^at an LTtad in Aa ««aia of pvbrrrkiB tto UwdMtT* Ptowa vd Andbna, 



ILGUEE MTKICT IIUWOIPALITYAM) IT* C OR TROLLED EttflTV 
HOT** TO THE RMHCTtt ITATBIEIfT* 
rwlho*ffcKf«r«MMJuii MM 

GROUP 1011 GROUP UW 

1M» Ml* Mil Mil 

R R R It 

Cvrpu'jt Kfipnwni Wiim ** fof h# ytm*. On Intent»**■ Wwgw) ft fc*#d l Nprinink Ito bralrwtlpn dWalt 30 WpWilnr 2020 On twmm wirtpUd sncWy 
trti lodut* miWww w nod hnrtoot, AumnInWton W tf* 1 — »t In eompulf nJ|w«i<nwrt to lh» k w a. 


IT 


74? 



ILEUtt UttftCT litMOPAUTY AND (TB CONTROLLED ENTITY 

Horet to-me financial *tatb4ent* 

Ftartfw part* anM 30 Aim 2010 

GROW IM GROUP IPH 

301* Mil Mil ml 

■* ft A R 


1? J OPERATING LEAK! 

Lhh of MatwVihWn 

*i npwtino da* tha Munttpadty ho a jMrih or iw* «r*«t «Rh Wartanfcfar 04 Imm otootoi w**a*. TMa cantact had 
b«n klMyirtrd Inbki Ortabaf 3016far * p«!td rfM «^Mh 0ata*ar2017. Tba oorWad m MMy 

dataSada* ■ tare* Imm and ww d**y of ft. Mdal contract, Ham daaafed a* m gpvalfag Imm (on tub** of fta 
comet harim (*fl AoUtad to month cn (term TTtar* I* no Mum taandaf contiriwwl la ha tfadaaad 4* to Imm Mr* re 
fAdlarne«iMW B Upt*n.AtMAn2ciiMvinL<Mit Mwd(>farOracritf*artsltla 12 fro*.fartfiaInandaJw* 

Wid|c 

Wwtoooplara & Pffnfara 

At *m rppotfng data Ih imnfclpatty haa cuUtandrf nn nfananb ubd* apataCrukaaaa wHcti Ml ImaMm: 

Tb«M titounfa ara It* actual tfliduiti pm Imm mtraefa altar ippfyfag Nrafaf**« n«i«lwar » mw** 


t* 7*4 *79.44 


TMImw 


WBntron*yMr 

In lx Mesnd Id llkhy«ir 'ncfaMaa 
Aftar Inr* yaar* 

Total 


J304M3 21M137 iCtOHS 102*101 

3 M3122 3113 Ml 



cLKp^iS- ^*^* ^0M < S!iS?r5iit^iD!j 3 * w * rflWB ** f U3** n ■* u * 1 p*» nwn ** <■ *• *“** ^ 


Tlw entity antarsdirfe a l«a*a town ant far ra Beanery iLawad far 6 prMtafi mts&aym nHeh a lor IhapailarfOi ^rl201Blo3i 
Hnh 2C2Z 

Opal*** U4»Lfafam» limui *12902-3* UT03ZJ* U7 D32J0 

Ooarsdho Jaaaa Dmtrb rapr atari nr lata p*y*i« by f» rruildMtty lor mmkttfpnevVm 

Th* w n*(otWM ler Mrtod* fxntfha *m 01 U«n#! Ml* morth* io M PMfiwy 2022 T» MMlitia, w« ba id* <r 
(ha Vrxa. VHvaMbry ot |h« wnTact 


1* KRVKC CHARGES 
Si‘« of Malar 

Bwnp and WfJlalion charts® 

PaVaru P arpana 
Total Sirviea Cturpaa 

SaeacfMtarla brsVan do*n into pr«p<rd u«a and ooft**rrtorA r* ala's watar ta** 

1M *al« cf Watar 

PrapaMwalar tafea 
Ccnvanfcpal natara Mtv aataa 

Rawnua Fcroma 
Total Watar 3»« 


II RENTAL Of FACILITIES AMO EQUPMENT 

ILanba AuOtarlUn 
RaiUai of factftfat 

TaUI nrdafa 


» JJntflOTEAMEO.flANKBALANCE* 


J ■ INTEREST EAPHEO - OUTSTANDING RECEIVABLE* 
Inlaraat an dr b tan 


22 OOVERKlfOff GRANTS AMO 91J8SBIEB 

Oparatiatnl Ofante 
EaA*Uttlan 
WG Giant 

04iar ( k wi na t Grant* and ittaUn 

Capital GrarM 
W3kl 

Mwfdpal .’ntaatnioai Oram 

Otfw Govamnanl Grarta and Subahfaa 


Total OovananaM Onnt and SutaalrfTa* 


221 EpiltaMattwa 

Bahnoa unpaid at bagta in fcia af M<r 

Cwaritwraeafofa 

ConJScna mat - laaft n N \a raranua 

Caottiana mat 

222 Aluidcfeal (afnataiMtiaa Grant 

Balanaa nt*M at ba aliudn p of yaar 
CunmiMVMMWi 

Conilen* mat • Inrafanad ta isvanua ■ OFEX 
Condlafia mat - tranafand lo ravarua. CAPEX 
A^iatmanli tail TrarMin 

C onA l tona mat■ baJanaa istsaJo totianaW paymntalabtara lattiWH 


223 HAS9M1CATI0N GRANT 

Balanea unapant at bag^alna of pair 
Curant war racabta 
CendMana raal • banafanad to ravanua 
AftAtomta and Traroim 

Condition a«B ta Ea mat. raisaJn HatalRBaa (aaa nata 19) 


! 1 * 072 600 '1(f72SOO M W* J-I! MM9HC 

37M7 757 37 3*7 7*7 «!«!■:: 38 IK - y, 



22*** HIM S«7* 9 07C 



d** *00 049 4***00 049 41*794000 41* 794 DM 

S«*nUT 2* M2147 3**32002 M 932002 

7 731*00 3 731 000 2 300 900 2 290 000 


4017*401 4* IT* 401 *0044 7*3 6**44 7*3 

1*4*10*93 104610*93 17*201019 170 2*1016 

*6 232 744 91 101 709 114431*60 1134*3 030 



w rot m 1004*31 ri*io* 4 « 3 ^ 

19*60*000 1*360*0*0 14*12*000 1M12B000 

(S3 M21471 (23*42 147) 

11*4*10*921 (104 610*02) (160 014 604) (1*001*60*: 



*000 033 4 030 000 

13 14*403) f* 14*4031 



243 



LtRtet OWUhCT MUNIOPAUTV AND IT* CONTROLLED ENTITY 
NOTE* TO THfc nUHOAL VTATEN ENT* 
ft tfm parted mM 34 Jam 201* 



ONOUF 

low 

GROUP 

mat 


mo 

tot* 

2*11 

U1* 

Z2A REOOHAL BULK MFRA4TRUCTUR* QUANT - LTBWS* 



R 

R 

Mvw* m*P*N at kt^imln* af mi 

(14 970*83) 

14*79402 

(2742*449- 

(27 423 *541 

entrant yaarracatota 

142 930090 

78 440 000 

149000900 

145 000 DOC 

Osndkn* mat-hnAnj to iwnw 

(102 HO MU 

(4* 601 2*2) 

(102 09**01 

1102904 491- 

Ad^atmanli and Twtfn 

CeftdUJon *lt| la to mt. rwnata ItoMSki (aaa nab 11) 

- 


27 423 444 

23 *44481 

14 479 M3 

~ttwtbt 

ai* RURAL TRANSPORT 8ERMCE 





War** uniurt A baghmliig of ntr 

Cvrrant yaar raoatpta 

Condtkm mat * bfatorad to wwwn 

AdtoHnttU and Tf4n*/a-* 

2 271 000 

2 2t\ W» 

2 271 900 
it 271000) 



CmMsn mat 

- 




12.7 TOWN PtAWCNO OJUHT 





Bafcnea umwiI at Mnnlno afyur 

Cmntitonmitla 



300 COT 

300 00C 

Canfforta mat - tramtorad to iwaww 

Adtotmtrtatjnd Ttoratoa 

- 

- 

(3co oan 

(530 rac> 

22* WATER MRVWE* INFRASTRUCTURE GRANT 





BahiM uiapantat bagtnufng atf ywt 



13 04* 1)4] 

(3 92* fja) 

OftmlNV(ani|i* 

100409 OCC 

ICC 500 OOO 

02*09 909 

*2 400 000 

CcRMonaiaat*tranttotod toman* 

MtNimAiNTiiwIin 

(40 178 401) 

(49174401) 

{5* 571 *24 J 

(« *71 42*- 

CtrtdUoM atm to ba mat - rmln Habtoflaa (at* nt* U] 

21 224 429 

■1434 439 

* 

. 






Batenaa unaaant at toftfanina a# yaat 

1200 000 

1200 WO 

993 842 

9*2 12 

Curani yarn raeafete 

CorNUam nat • tnanaftoad to marw* 
iMuatn anti and Trwttfin 

CanAttona aNN toto mat - vaaiato DabUtfaa (aaa itota 11) 

* 


2*7 CM 


257 064 

1 jtPIQt 

1 309 M9 

1 29* M0 

1200 309 

22.12 RNAfldAL MANAGEMENT ORANT 





Batonaa tmapanl at baNntdng af yaai 

Ctmffi var raeaipu 

■ 290 000 

10WWC 

1 26QCC0 

1 2*0000 

Condttona mat ■ haftttond to ravafe* 

rl 250000) 

MOW 0001 

'1260 COO) 

(1 350 OCC' 

A^iiftmanto and Tranatoa 

. 


CtodUMiMl 

• 



. 

22. f* ENERGY EFF1CCHCY ANO OEN AMD*W0£ 





Rafanaa tmapant at baRlnnfnv of yaar 





Cunant yaar rag^pta 

7 000 000 

7000000 

aocoooo 

*000 ooc 

Caadlloni mat • YanaNnad to rawarua 

(7W9 000) 

(7000 000) 

rt «C 300) 

(* UG3G30S 

CaMWaratnat 



* 

* 

22.14 EXYAMJEO ftfBUC WORN* RROORANNE 





Bilanaa umpantat baglnming dk pair 





Ctnat* yaar raaNpta 

1000000 

17*1 m 

'OOO 000 

1 030 .CD 

CtndMoMNA'toNtaiNtoiMnu* 

A4**n*nfc *nd Tranatoa 

(1000 00ft) 

(1731000) 

(1 COO 0001 

(1000 an: 

CandUJonamat 





22,1* OmCOOTA tUOMASSGns* 





Dalatiaa unapanl at bagtonlmi «f yaar 





Curanf yaarracaipta 

CondWona mat - tranaforad to mranua 

A^uatownta and Tranatoa 

CaodWona atfll to ha mat - ramal* RahBifaa (im note t*J 

4 247 824 
(2080 800) 

* 

■ 

■ 

: ■ i i»>»« 



_ r 

22.17 OmACOOTA RASETOnnt 





Salmon unapanl ■« totfnnlrm of yaar 

Cwaniraat rioibia 

4 347 *20 




CondWorta mat* tadatond to ravin* 

Adhatoant* ard Tmnatoa 

CondHfona atJD to ha mat ■ tomato tlabdMla* (*«• not* id) 

(544 lift) 




rjwTir 

r~ 



till OfWK RASA 





Balanoa unapanl at togbmlng of yaar 

Curant)wrao«?t» 

Gondfena mat - tmtovl to rwina 

Atjurtavanta and Tctmtoi 

CandWara atmia h* mat • ramato RabUHtoa faaa noto 1*) 

220 000 
(107 778 j 




UI2* 


. 

j 

22 M Ormt Itomha DtoMct NimfelpaMr * Toudam 





Balanaa unapanl at bagtottog af yaar 

CXnatd yaar raeafpta 

Condi dor* mat - U tutor ad to ravanua 

Atfjrtnanta and Tranatoa 

m 

t 350 COO 
(t <60 COO) 


501 2W 

1 535 Ml 
(2 1*4 205) 


CaaOdgna attl mat 







ILEMRE DISTRICT MUMCtFALfTY AHO FT* CONTROLLED ENTITY 
NOTEJ TO T* mUNCUU. STATEN ENT* 

For Itw pariod *nti*d 20 Jun* 2*1* 


GROUP 


22JH NiptuMita IEC Otiftt 

Batanaa timpani at bagfafirt* elyur 
Currant yaar localp ti 

Gondnfena 

A^uXminli and Tmufari 
C an J tf o na »al 


»m DawlapmantoftltllEa 

Salim mp#nt at b a ylia dn* oty*t 
CuhoI ymr mripti 
CandHona mat-Iramterrad la nvMN 
A4u*kimttffdTn(MlM 
CandJtiona mat 

2UJ UrtntCOOTA Atefe ftTFTOsafli 


CondOfon* Mt* tfanateitod la rwaia 
Afuaknanb and Tnncfan 

CatidWoo* *dfl to b* mat - twt aln IteWHtfa* (m rot* is) 


U14 Grant COOT A MiniFactarim*Gtwit 


CXarantyaariaoaipt* 

Ccnddona nil binfaiwJ la nvnut 
A^utonarteandTranatat 

CuiiiIRIuih itfi b ba mt • nmih Tlahltnln (bi nab IS] 


3*2* OhoMdMN«afidl>*valiv»afbCunat*MT«-C09T>l 

Balanot unapanl at btoliwibiB of yur 
CUtontyaarraeafet* 

Condi Sa na nat - tqmiawl la ravanua 


Corafltiom iffil la tv mat * lamabt bblIMN (hi note 15] 
2120 f«C ©OTA 'tEPQrm* 


oaouf uni 

Mi* mt l»i* ana 

RUHR 


TOO COO 

:osr«»: 
at 6001 


700000 


705 500 


(3 9*0 000) 


SCO 000 
(600 COO) 


■ t 

2179016 




(656 2451 




1 317*57 

* 

- 

, 

zmm 


Tt'frill 


13195* 

. 


SCO ooo 

, 

(1M691) 

191 953 

- - mw -r 


Batanea tmapard at bap to nlrt* of yaar 

Our rant yaar raotipto 309 609 

Owdhiana- li a n afairad la bwnH (126631) 

AifuatavantaandTranahn - 

Conation* am to b# mat • ran**tn HabfEfeh* (aa* r*t* 16) _ 1 ** 033 


HIT 12.1T Tauritm Kfeig flhaki Raid* 

Manoa taw par* at bag toning of yaar 
Currant yaar walph 
Oondia na raif - frana f ir r ad to ravanua 
AdMawda md Transit 


<7 57001 

(04 000) 
(23CCi 


± 


1121 Grant Ibmba Dfctrtet Nimtafeatlto ■ LEO 


Bahaa* ti m pani at biohnlna of war 
Cwrart yaar t tcafpt* 

Condkrta mat»traNi v ad Id 'warn* 
Aduatnanto and Tranafcia 
Condition* mat 


6000 000 

6 cio can 


09 *99 
3 343 COO 
(3 542OTI 


XLB 1S.it BrmrtH UMBrm* 

Bdtno* uiKMrtt at ba<rvtoo of war 

Cunant war raea'pla 

CanJCona mt • hodaad to mart* 

Condflfona stTU to ba mol - lamaln UabNltiaa |>*a nata 15) 


23 OTHER INCOME PUBUC CONTRIBUTION* AND DONATION* 

tM Otharlmm* 

Tandar Onxmant* 

d aaranc* carCitato* 

Prvatodavitontr* 

Sa Water Cavmon 
LG SatabKOna 
Etdarvriaa Oaaiba 
Char ad Sank* 

Badd4MH*eev«adA0**fc*lnattoMoa(tominiatfen 

KmDJuna MurfeipNfey 

WtouiH 

Inaunre* rafmdi 

AUnlgrdto 

Tov’anKZN 

Of-«r hurni 


15 670 6t? 


9 9T1 509 

rtOHi 

200 244 

4601*2 

460 102 

1 674 6*6 

1674 605 

1912106 

1 312 100 

230 700 

236 760 

• 

«• 

17I4WT 

1764037 

2140543 

2140 04* 

3*0492 

960432 

» 

at 




600 603 

7 1)7 955 

2 1176*8 

4065162 

4 060162 

K K6 

65 659 

240 4*0 

240 400 

IC6 453 


6*707 


64 m 


47 TT* 


121 626 




aseooe 




307 S40 




30 0C3 


2200 


T U0 993 

n *rm 


. __ 9 022 4*9 






ILEMBEDtSTRCT KUNICIPAUTY AND It* CONTROLLED ENTITY 
NOTU TO THE IWANOAL ftTATEMENn 
For lha parlad ondod V) Jun* Wl 



OAOUP 

IBM 

OAOUP 

IDM 


Ml* 

2*1* 

M10 

1*11 


ft 

R 

ft 

It 

23.2 Ftnas and Panattfea 

llagal Ccmctbn* 

113590 

11355* 

M 601 

M00I 

Wafer Taaiparfng 

2160* 

31 no 

202250 

20*35* 

Atmoaphatto Emlnlon 

Ueancaa and Parmto 

15620 

028* 

1953* 

039* 

77900 

77*0* 

Otootnwdon* 

4 100 

a icc 

13920 

fJazj 


175579 

179 079 

UO 43* 

1*043* 

SU Gain / Dana) an aala daaaat* 

Losa an safe d aaaafe 

Gian on uto daaiata 

0635 Ml 
(747 070) 

0 010510 

300534 

35106* 

Total Oafn 1 peaa) on aala of aoaata 

- mrm— 

OSfllML- 

_im. 

Ml Hi - 


8**frdwo«febfe*-NSMF 

WtaaaaTat 


21 vrt an 

HIT) 67* 


Tin Gndty haa * cental wife ft* Ofetartota* d Education (DOE) tor fe* dvagotetfoo to tdwda wWn 

Limbo EMM DOC aid fea Entty atgfttd • 3 yuar OLA conmremg Oft t A* 2317. to April 201*. fea £nEty 
wa* ruyi trial to nf^(y Ann' to tha actods w to Jum 2010. 


1103147* 


U EMPLOYEE RELATED COST* 


Enrfawa rtfefed toala - titorlN 4 rtd WiflO* 

Emdoyaamatadeoata * Gantofeutfeiu forllF pandora ind aiadnal odt 

Trawl motorcar. acccnvrcdaOon. acbahtanca and otnr algwarwat 

Houdd b^db and altowamaa 

Owtb*cttoidi 

Pffan n wfndoUmbofwm 


POvmofda toi*J d Lotof* 
MmPinilM 

Ofear orrdov** rdatod «*t* 
Emphyaa Edited Gaata 


140 435332 

132 742 601 

113 1X025 

120 900600 

30 7*7 045 

23021 412 

27 077 6/7 

27 CO* 960 

0 435 001 

0 24 1 623 

1057 783 

0000417 

900 5*1 

$MM1 

963712 

553 712 

*423 54* 

3423 546 

*066 370 

0005370 

10 112095 

10V2M3 

*10*900 

010*500 

1 070 323 

1 07* 326 

734 COO 

734000 

1 472 *70 

1 472 970 



3 172 618 

2067 654 



7 301 173 

7 39- 17* 



* 359015 

7690 202 

IT 137 Oil 

it 371 6M 


iionito 11 zozi** WrttW ...MMm. 


Tht'i wn no idvirw to uiptoyoo* 


Rameau ration of lha M inldpal Mltottr 

Annual RortjnmSon 

Trawl rrotor oar anomaiadation. •ubailfenea 
Coditodtmf to UIF. MkIM nd Pmlon Fundi and odw 
1»nOvK|iMPnntok>n 

Total 


7M 4«0 

7«4#Q 

' >3933 

rl*33 

79 02* 

79 62* 

14 703 

* 4 799 

01933 

91 633 

207 

292 



0 279 

027* 



1204*4 

120 454 

*TitS 3 

91*962 

mm 

HIM* 


Du Municipal Managar puaOcrt wa« Had to Au^M 2010 


■ u i n awai am CEO EMarpria* tl*mb* 
CEO IN WtoatMavo * wpdntod Jim 201T] 
UF 
Total 


16U4M 1443 3M 

. -Jg __ US. 

ii&ftt _1444131 


Ruunratton d tha Chlaf Fbnndil Oflfear 
Annual Rantunarafon 

Trawl water oar, ■eoo i modaawi, aubditoota 

CanMbudana to UfF. Matt* and Pwaton Fund* and ad»f a ia wncaa 

Ptbnrarat Benu* 

TOW 

RanK*nratl«nt CTO Cnferprfea tfemba 
Annual Ranunaratni 

Trawl motor ;«r acwnawdOCan. tubdatonci 

VWfcdAJd 

AMdonFiaid 

JF 

Total 


1030 722 

1 096 722 

00*677 

030 677 

79 024 

74*69 

54000 

54 300 

1 703 

1795 

1 334 

1 33* 

1 114 399. . 

. - 1114 39$ .... 

9*4 «t« 

831*19* 

t 391 9-6 


W0 3*5 


42 100 


*0 000 


43 294 


33017 


190 743 


43 032 


t 795 


1 795 


1 35* 400 


113* 422 

- 


4* 


?4fi 



ILCURE OOTMCT MUM»C 1 FAI.rTY M ttt MMTAOUED tH TITY 
MOTES TO THE FINANCIAL STATEN BITS 
Per 'ha parted a rated N Jaw nit 


Bmnwm*0*i NhA LEO 


Car and otfwr atowarwaa 

MvAodAfd 

PapatonFuad 

UF 

ToW 


MadfcalAW 

PtoufcnRnl 

UF 

TaW 


For tha parted andad 80 Jana 3 


mnodatfen. aAriatuca id ctfar oSiwarw 
gdW and ftodcnFimda 


Aa at 38 Juno 1818 
A.'ndRomrtrdsn 

Trawl, motor car aeoamiwdaicr. ubit m roa and otior atowanaaf 
Cumfeltona * m= llatfcatnd Panafcn Fwli 


Total 

TM petition Idr Otaie^r; T«cHul Snlcu » ounorty w 
» RCUUNUUTIOM OF COUHCILLOAS 
k/ayor 

DvdtMnw 


OouneNota 1 Atonanoao 

CoundSwn 1 aantfea and rttdtote *M wntTButtar* 
Total Caancfttora’ JUnMiaarallon 


24.1 MAYOR 

AttvwtMM* and Strafe* Rotated Banafita 


Cal chant Aiowanea 

iraraat Rotated NorvPanotooao'a Ntom re* 
TrawlEna AOovranea 
Uaaal Partcnat FadWao 
Racial OardrHndfona 

l/adfeal Aid Baoatt* 


Total 

2U DEPUTY MAYOR 

Alnwaacaa and Saratea Rotated BanoFUa 
Bade Salary 
Cal ohona AJtemnoa 


k»-MM 
Uarfcat 
MoWWk l aAlioateftea 


OddoodwtEioaiwt 
TmaOM AAonane* 

Uaa of ParaonM Fad daa 
•aalal Cootfarfteillorw 

UatolAld&arafta 
AanMon Find Cant butter* 

Tote) 



PttWan Find CcrtAutfen* 


TaW 

UA EX ECUTTVE COMMITTEE 


Rada Salary 
Cal ohenaABovwica 


MdndRvtfte 
Marital Ralalad I 
Motor Vd lit Moaanot 
Oi fct bttrar AJcwanat 
OutdoodatEiMroM 


Uaa g| Faraonat FacflOaa 
facial CartortbuCtena 


Panaton Find Confbudcma 



OROUO 

IDK 

OROUF 

1D« 


mt 

nit 

2*18 

2818 


n 

R 

R 

R 


1 Ofil 088 


730 505 



58 704 


310 152 



5' m& 


3C054 



r aes 


21 373 



1 7 S3 


1 755 



isuro" 

* 

1403 Id 7~ 

i 


004 485 


716 868 



80 874 


172 044 



4)030 


IS 435 



55 881 


24 550 



1 785 


1785 



1144 701 


055 072_ 

■ 

taatedanl 


Corporate 


Carpai ate 

Sarytaai 


Rarafcaa 


Gownanaa 

ft 


ft 


R 

All 


600 440 


50? Ill 

bo ooo 


WOO* 


32 100 

23471 


82 557 


1 100 

n»m 

- 

700 304 

* 

625 47* 

Tachrdcal 


Cinpwata 


Corparate 

lavlw 


•arakaa 



ft 


R 


R 

1 l7l»1 


807 854 


210 803 



283 473 


13W0 

1038 


83 417 


445 

12 782 


38054 


07930 

11M130 


iWfTJ 

- 

»>IM 


1047 528 

1047 628 

10M8U 

1 005 506 


845152 

840 182 

815 20* 

415 208 


848 182 

845 182 

815 2C8 

8-5 ro« 


zm tw 

2235 182 

2052 113 

2082150 


3 830 m 

758*774 

3 474 825 

0474 825 




200 714 

200784 


arawr 

- i'tHHi — 

444 tii 

8411801 



TOO 483 


887 829 



40 530 


40 808 



208 411 


S8 080 



ICO 584 


242 002 



t*4TM* 

T 

I t> 0 J lot 



504 037 


EUIM 



40800 


40800 



27581 


21325 





*TT^4 



wiE 


Sii 204 



147 4A1 


518070 



40 800 


40 UO 



78538 


35117 



mm 


1P68^ 








1 *J4 630.05 


1 428 901.78 



12? 400.00 


120200.00 



257573.88 


201 243.12 



in JTK* 


IM !R* 



113185.07 


115*6048 



7101 182 

' 

ZZJMSS. 


?47 



ILEUS* OirmCT MUMCVAUTY AND ITS CONTROLLED ENTITY 
HOTO TO THE FHAUCUL STATEMENTS 
For tho porfMl inM SO Jim. am 


Hi ALL OTHER COUNCILLORS 

AUommm «nd Sonrtflo TMotaO Bwwflti 

«•***« 

C*i ehuw Mfcmono* 
iw™"i Mgvnnoi 
Mdnrf BanoftU 

M**N Mom NavFnboU* ASnwiwo 

MQIDT TWKM TflOkWhQI 
Oftoo boom Alhww ni o 

Out of oodul Ewma 
TrmlngMiHnci 
Oh *# PvMnaJ FocttJ*. 

Noof*| CortrtbutfaM 

MmSqoI AM EUfwlU 
fViNon Fu»d CoiUrfUOoo* 

ToUt 


2MT *077 
2W600.CC 


3 230186.04 
2S0B0D00 


!1»U^,OuL^M W S^kjrondEd««li»Coinnni»U*nfe«ior*Wl-(h» £«hbpro**od «l{fi on die. «d hoivW ttw sutof t 


Tho Miyor. Doputy kltyer onl S 


■ ha^UlfvCwrcrtaHiodH^UrQl^dufw. Tlw M*>w Iwi 4UMci»froUc*t. 


REMUNERATION OF BOARD MEDUSAS: 
A&irdatt* turn ol nooSnoK 


K8 6twAAi.Cholfpv.on 


(AppolnUd tUtvnlHr 2915} 


ATNwno-OputrOidfporMn (R*AppoMtod FiUuatyttll) 
DN'uu (^ccwinudNovombv2017| 

JC Odd*. ■ (RowppoUUd F^-uoryZOlT) 

ZSG-moe* CiPP^InU(tFftnwry20i7i 

******** (AppcdUd F*U\,ory 2017} 

* Mr®** (Appdnwd f*U«ry 20TIJ 


TotM Botrd MimLort' HmuimIIm 


» MPflCCtADON, IMPAIRMENT AND AMORTISATION EXPENSE 

W6»a* ei 

■npofcinaal HAooot. $; 6220 604 

— .jgal Jgg - j 

Th* iwpoUronl wopfe*) motnty idatw to ^ pUnwrt of InfeMvciuo mul* Aw to tlfidtawii dwnfl*. M T» roffaHno woRi Ivoo of thwo a 
27 FINANCE COSTS 


ToUl riranH Co.to 
It BULK PURCHASES 


WSo 

ToUl Su&PurehMM 


?-07^ n»w 5WaW2 

SS7SW _ T6?30» _ 2 1S27B4 

5154 wi tVutti loarigT" 


m«»«n IWWS471 _MS066I2 


?dR 




ILEIIBE DtftTMCT MUHlClPAUTY MD TO CONTROLLED ENTITY 
NOTES TO THE 7WUMC1AL STATEMENTS 
Far tha pvriod tnM » Jim* Hit 

GROUP I DM GROUP H)M 

toid t«t 101* 1014 

28 CONTRACTED SERVICE* R s N R 


(Miiitid uNtnatBr 

Malawi Sdwote (Yooroiw* 

Phntnt 

VIP ToNatt EvmAm (AVO OwntSonaft 

Rml ftcada AaaataBvatenii Vmemrm* Grant {RftAUS} Ettandfcn 
Coftautthfl arte Proteaatenal Faaa 
Ctearlrp lanAe— 

IrteMiuA 

Saiga pan aa 

SAGE WP LICENSE SU 

ANALYU8 OP WATER AM) EFFLUEN 

EEOSM IWLEMEKTATTON ■ RETROFIT CONTRACTOR 

madteaf airport harUiia day 

EPWPMVMQUtho 

EPWF Or*** «*r* - EPWP Funds! 

Hudaittavlni 

tteiflawy laotean VMfcr ntite leak 
RISK MANAGEMENT AWARENESS 
OacupadomtHaafth ark SMaty 
CONSUMER OATA ANALYTICS 
LU SUPPORT 

madcM aanteaa pmUad on SALOApmaa 

YOUTH PROGRAMME 

EAP filaflAmnte Sound 

EAP OouftdBtea Rater* to PtYctaferfit 

AUDIT COMMITTEE 

PAYROLL SUPPORT 

aanaiNrR sMatinanagamanl 

UUN30FT CONSULTING FEES 

RISK MANAGEMENT COMMmEE 

MEWCA. EXAMS 

EEOfiU CotaJdn* teaa (6EPSJP1 

EH)5U GxmXkv <w (Prefect Ptanbv I 

FOOD SAMPLIN') 

LagalFaaa 

Gcuan pan* iWrfe* aakcSana 
Cal stop O anAoaa 
Hxv IMk CwMtoh 
ftepaYa and Mn Wa rn im Cwlidid 


TSOI* 504 


1)757*47 


306)277* 

30 032 778 

33 372350 

23372300 

2071*467 

28000*78 

21 80S OOO 

21 405 060 

2900273* 

2049273* 

3853224) 

28 £32 283 

1074 725 

1 878709 

1 074008 

1*78 008 

4841 670 

• 

2161066 

1*34*44 

844614 

70)080 

0*9004 

4*3 712 

243 Ml 

11000 

39 400 

35 800 

207033 

207 033 

*050 

5050 

121200 

121308 

113))) 

113 353 

7844 861 

7464 Ml 

. 


4 317*54 

4 317338 

. 


434 

434 

. 


1011003 

1011003 

284 766 

2047*4 

3)65 180 

£36414* 

*44142 

444142 

69 474 

60 474 

174 456 

174 459 

4940 

4*40 



33821 

33*31 

. 


317*30 

5176)0 

180 750 

14)750 

830 210 

038210 

7)8080 

7)0440 

170400 

170400 

171 841 

171*41 

10430 

10420 

240224 

244 724 

147 617 

147017 

248 224 

240224 

2 156 

2130 

5005 

50*4 

1)600 

13*00 

11030 

13450 

30*390 

164300 

2*4827 

196 466 

1009*4 

100 454 

179 47) 

17*47) 

470540 

4754*0 

554 410 

*54 413 

480 086 

800 080 

. 


2144* 

214)9 

43330 

4)330 

39600 

29 000 

7 02C 

7 030 

012 127 

413 127 

„ 


644*44 

*44 344 



*211) 

52113 

56 402 

54 0*2 

1 888 351 

1 *12 702 

* 440 407 

1432573 

23600 

33 600 

1690 

00*0 

481 180 

576516 

266 080 

206745 

1 1*2812 

T 193 312 

- 




SI OEWRAL DtftWES 

teMUInsain a*>«aa n tha fuftmto*- 

Adwteina 

MR)Im 

Mdttea 

Sark tt+ty* 

Butaartaa 

Broadband Jcandfen 

FWaitoal 

Inaunraa 

Joancafeaa^ wtedaa 
Iteanet faaa ■ wraeuiara 
MambanNp faoa 
Portia 
PoMaoa 

flmt ar M anaparwant 
Prtndnq and aWSonarv 

ProteadonN laaa 

Ptoparty ratea 

Laaaaol nasHnarv and aqteFrianl 

tebacPMoti S nidoaSon 

PdnfcaaasfWfea 

ConTnroa andnakatop 

Oav*arrant cl SWJJEr 

HteratfandPamHaa 

Marttafto, CwnnAciCer. I tetftnpii 

Tdidw««oti 

Trarim 

Transport daina 
TnaladaNliiaw 
Uniform* 4 orai l a 

EjRNttUat OpanUwW Oaat nrfaf 

Water and ElaettSy 
Maohartatfon 
LEOFWteate 
tefeaosna* 

Tartan* avarda *rd axNbfeni 
Oon aa aiab t aa (Rapa** and M*fcrtararfli , i 
OteritealCoiURtoite and Mafetaranwi 
Sftarad Smyrna 
V^ktartra 
«» Wate 

A4cln OMU/Contunada* 

FYcfacti Ej»*idfaaa 
LftF Laamar SVpanda 
AuftCoai aitta* 

Winary Opwatlon* 

Oditr 


IMNS 1 504 710 1434430 1183114 

3 043444 3277 367 3 036 0)6 2 669 637 

433613 433 444 400478 430 341 

204 133 3C4133 

27 6*2 - 11440 

10 347 407 14022332 13333 407 13 004043 

3470414 2470414 2 330 Ml 2330041 

H72S4 117 244 134 023 13402) 

2 333040 2 433 044 2 100 310 2100)14 

2017 423 2 44440 1410 IIS 1 404744 

112 4M 112400 447 434 370 347 

34)414 144330 3D 724 100 Si 

346444 334040 424047 034047 

72714 4 0 350 

141*41 140373 

30 334 56574 

43410 43044 

417 234 3544143 621241 

60627 57 474 

1«» 433 4 73 434 

674107 111 144 40)477 123 23T 

4 444 70* 1317)0 00 046 


3 02* 135 2544 027 1 403553 0O46M 

14*6 104 1 432 191 153 1)0 13)1)0 

2 403 143 2 445143 

4042 039 40*2065 1306016 1)44010 

20 43S 030 3*8372)1 21003441 25 000 000 

1114 424 344 475 

2)7 340 2*605242 24 083452 


1349 040 
7 400114 
6 2651*2 

16 004 102 

44 2*4 
4 736529 
2 642000 


7360110 

8209192 

16 7*4010 


1 675 153 
15*60 626 

2 27701* 
443404 

700* 444 
174 000 


13 660024 
2 277 010 
4*3*04 
7 008044 
174000 




94Q 



ILCttHE Dl*wcr HUMC1PAUW AMO ITS COKTROUSD ENTITY 
MOTES TO TfC FINANCIAL STATEMENTS 
rpt tha parted an** * Jim LOTS 


1 Rapafra and NitMantn 


GROUP DM GROUP IOH 

»«* »1» SSI# 1*1# 

•* * R R 


nap** and MArtm™ la nada uo of <ha Mowdg; 
Conaun atf# ■ Lwartarr 
CenEnctad StitM 

TaW Btaandten on RapWi and Mafntananc* 


12 009 304 1200930# 59I0U0 13*00020 

dm=z mt 


91 COdHECnON OF PRIOR YEAR ERROR*. CHAMOEMACCOUMTIHOPOIJCYANO ADJUSTMENTS 
Pr apart?, #Uni and aquIpmaM 
nkrfMrtrw 

Tfa* an# othar Ra ait n hlaa Mam a»h*rt* liana aattena 
VAT not etafood atanptymntwnnid* 

Camaodm of prkrwrt*n**ctbt* Otttvt 

GPAP l64A/jmtm*it 

T^uIa nriui B '*•- 1 - - 

J WM Una war rT/IWH 

fhariwAy^ A faj^toCa^WUrfCfta^ UbmjjarV (43 m 7*4' (4913*794) 

Oandtaoofpr«rin«rMEr**m. 1.30 172 374! (30172 374) 

_ 

ffaaraatai irosiaiaoT 


Prepare, Mart and adulpmafli 

ftferjaar*nrOT»«gn«bn cfteafea* ffiatara 
CAarwtNaatnMN 

Cawtian of prior &watrat on mm$ 

Rtaep&on ei dRpmcfrtisn far firefKir tnmpfcfad h prior >** 
Cvracfta a/fcaaadaM'p^ 

Tnda and othar RaMhabtaa fivm axchanpa tnnaaettana 
Cowactim (V prior *a*r tnan>actfenr«attva 
VtfAba*!*** 

Caah 4 eaati «#IaIw4i 

Ana^diMyim/HtnMvlaprw'yvvi 

0*ar 


Tnda and othar CmUbir* 

ftwafMf c/prfcr a«tinfdt 
ftrrartfcn n/prtr yw Pad* er* 3 »ar± 

Cdnaetton a/prior y*ar MaaaVfeatfen on non anharwa raeaArahfta |WJC 4 WSiGf 
J>*d« and Otf>n- Pa^obtoa 
ftgdabn an# tayahnanfcUfriciBn 


(71143420) 

(71 143 4201 

3000001 

3100 001 

(19110 040! 

(10110 M0) 

(11 029447} 

<11 024447) 

B0107.71 

30 100 

1 39# 000.40 

( K2134) 

1170 070 


044 00400 

344 006 

( 270) 

<3 933 102| 

& 333 102} 

1000020 14 

1000 021 

T 424S20) 

(1424 3701 

! 1 SOi $09) 

Id ITT M0) 

fO 177 1401 

JKJS. !!S1 _ 

—«m«™n 




?«;n 



ILEUM WSIWCT NUMOMUTY AND H» CONTROLLED ENTITY 
NOTE* TO THE FINANCIAL ftTATEMEHTE 
for Ihe parted ended U Jin* 2616 


OAOUP 1011 

1*1 B 2M8 

R * 


CROUP mi 

Mil Nil 

r n 


»L1 RECLASSFKSATVQKB 

The catapvy *4 harKape *t hU ha* been radaedled Ron property, p«nt arid **ipm*n vd praiantod a^ttraWy an tia atatanant o^trandal podtoi and nde to t'eamiel 
flnandal atalamantL 


PayaMaa 

Interbank Irtnatort h*a been rcdauKed from oeth and ctah al bant la wbtoa widw annul EaUiiet 


Other booma 

Flnaa and petto*** |m bean ractoutfiad aa Rra and PtnaNaafarn dfrer toeene under ellw teona 
Water lamcfnn Inaadi Ai na 
Ftn*a Ragal OKtoecOon* 

Akncytfwic am^aalon ffc toe 
Water deoornedfenrrandaril 

Sarvto* Charpaa 


202 MS 2C2 2S5 

68591 aa is 

77600 77 600 

19 BM 19638 


fVvNa Jwa l opa KnaCAfcua haa bean radUdXad 6cm o8i*r rpttmt to aanfea ehargaa 
to tiaUMainartcf parfarraanc* 

Repair* and Matananaa 

Ofiar Npaira from Rapaira and Ualnbananea haw* faaan mdataiftad to »muiaUa 
tovartov to aanard amareca 


3674033 3974033 

18680038 16 840 028 


Ccntfacted 8 Trie— 

mdaaaiOad 6cm Grad Ewandlu* to Contracted Santee* to rtatanvd of Hnandal perform anc# 
ftonl mad taut jnanagvnant aywam 

W*WW Va KnKVn|0 mrKJpS 

UephumJdne vfeteltafr 
Uandaniaraa Ri Mala 
Ndwadwa araa dpldlete 


1678 006 1078006 1878608 


8018 880 8 013 880 

1884904 8 884 304 

10833 886 10 833 880 


Stctamanlcf Dnandil Partooeenoa: 

CantAdadlMdota 

ExpendSur* IMiiiMad From General btpandlhn To CantmvM Sentaaa In ItdwntM Ol Financial ParfaMmooe 


FYotoutondFw KPMO 

Ao<S Commute# 

EPWP Grata C*6ig 
EPWPOfaa* CyKtoa * miP Fu*M 
Hayrel Eupporl 

ConatUng Aaaac UanatMmant 
flbhMmaoenartGarmttee 


SU* Waiar Ml Fee 
Food Itnpkng 
Land Fata 
Inadqifm 
EALCAGamu 

Odd#* Gars* Dtold Satector* 


OcManOcnu 

Ehta'tatorflanl 

SALGAOanaa 



Early CUttwod Daeatotment PioanaAa 
OaabfJlyFown 02 

GAP OojnoW o g RaWrOi To FiYsfidea'il 

VwJfc Pr ogram n» 

EAPOttE Award* Sand 
Oauaiwtar Hearth Ard Safety 
LMCmrt 

Cdnawiar Data Anaybei 
EPWP Omw Cutitofl ■ Eswp Funded 
Hfflfer* Carrie** 
totemd Aod*. 


398680 

184 080 

254 827 

188488 

1 011 009 

1011009 

204 788 

264 768 

3306188 

3988 100 

NIUJ 

6*8142 

100534 

100804 

176 473 

178473 

31898 

31 098 

49 326 

43920 

28 800 

30 600 

7039 

7020 

(TO) 

1740) 

. 

. 

174 000 

174000 


. 

63113 

83119 

38852 

35053 

1678887 

1078 887 

« 448107 

1433679 

384834 

904 894 


* 

118717 

118 717 



37 084 

97 684 


. 

8 080 

0080 



409 488 

409 480 

208 745 

706745 

207039 

367 036 

8000 

6090 

888814 

783080 

OM 871 

686071 

8803 

5382 



3008 

ION 


. 

3190 

9180 

- 


19080 

16090 

13000 

13 069 

147 817 

147 r 7 

248234 

240 224 

3138 

2138 

6069 

0066 

317 890 

917 860 

180 700 

180790 

170 400 

170 400 

171641 

1T1641 

098 210 

038210 

796840 

796660 

641143 

648 143 

. 

. 

88474 

88474 

170 495 

178 466 

343881 

310CO 

88900 

99 960 


Oanaral E»aniaa 

EtartiAun UdMiWtd from Cartoaatod SeMoae To 0*nar*J bamdtun In Rttonant Of Flnanatol Fartonrurw* 


P.arIHra 

VaNef* Hr* FerArySltf Man bar Or CosxxiBcf 
Softwar* Ucarpaa 
RarJ OTOfVaa 
F*x A Cockar Rental* 



SaaddUtd Campulv Ink* 
Sudotoad Cornett* 8wrica 
NatMotManacamarlEyatan 
Talaohona U*n*oarr*ri| lytltm 
ICT Ptaat* Raman 


9 781 440 

3 761448 

2486 936 

2466 936 

10084162 

10 780080 

7066068 

7688608 

110614 

110614 

116153 

111 189 

102836 

102839 

16*001 

158 881 

8043689 

6 049 809 

2007 033 

2 007 022 

2094 864 

2024064 

2 JOT 343 

9990 34S 

49 1«t 

49 160 

30222 

98 2ZZ 

22 776 

33 778 

34 448 

94 448 

99107 

28102 

Oft S08 

06 808 

307500 

307800 

134 800 

194500 

2 701 028 

2 701 096 

1 729397 

1 738 297 

376 COC 

376 C00 

348 014 

949014 


Tha Kama Rated Mow have baan rectaaaOled from alhar twama ta aila d produce dua la the nature of Aa toceate 
6ala of Produce 

■ Swot* of Vege ta ble* INSJfP) 18091478 

OOwr In c ome 

. Supply of Vtaatebtea (N5.SP1 


99 CASH GENERATED §T OPIHATKJffS 


SurpLiVIdaAcil) For ha yw 
AAidnrd fen* 

Dapndadcn and rpcrfMlOP 

Tranttert to/from aceunuteted uiluir[dikn) 

FanatLou 

Lou on dap mar of PP£ 

Cgrfrhdon to pmUn • non-owant 

Cordrtx-Oort Ip prov ide na - wnm 

RpanoaeotU 

Prior VaarAdfuafnanto 

6waa8nant 6toona 

Gad dabta Hrtoan dT 

Operating a undue baton working upftal change*: 


Incraaaa h bnwdariaa 
liWmdfto f y) to tada raeatoafelaa 
flftifap*a1*torrwa* In o«ur reodvablaa 
In erurdfl w y n ) 6) oondloral crania and re» T pta 

kRtonae In fraoe pavadaa 

Otornub 

Ofiar 8*641 ty 

Caah guiatatod Hdhdfllaad in} aparadena 
94 CAM AND CAIN EQUIVALENT* AT THE END OF THE YEAR 

Cadi and oath aqidnltnb ectudad to tha oaah low iiKibmI oorngrtoa »a totoefr'g- 


166 486 000 

186307909 

311681 061 

Mf 84*784 

106497607 

104 330 70S 

82063 101 

11788 580 

122861 

011 

889 in 

74 380 

73590 

72000 

. 


6168121 

6016018 

300634 

361 880 

86032464 

66022464 

41876124 

41 *70124 

9308888 

9200600 

1186 090 

1 880 030 

8164024 

6154834 

10080607 

18080 607 

1174 B9Q987) 

(172 788 024) 

29807 413 

24 234638 

(13104783) 

(12264840) 

TO 860 6081 

(tOM 482} 

171*246. 

1 710 >49 

<90182971 . 

(30162971 

183 331863 

461 mu* 

4*90*8748 

48*009 H4 

(9193808) 

(5373 DOS) 

4810 731 

0 102 748 

(18 189 925) 

(10 0076401 

(0 890 279: 

(0 428 360) 


- 

11282*87 

11 288 747 

73810210 

00090 830 

Or-3247 

14 070163 

18 923474 

0020822 

(49 «M 6481 

143 704 ".TO) 

a* 7*o m 

349 004181 

430141 Ml 

443 7*9*79 

04 033 164 

■74?«m . 

76619 *1 r_ 

70 709 1 74 


174 TM TV 

r* 813 m 

7*709 174 


Met aasli and eaeh equfvatanta (let *f to 



ILEHBE DtnKT MllMOPAUTT AMO ITS CONTHOUBD OfflTV 
NOTES TO TIC FINANCIAL STATEMENTS 
P*f th* parted mM SO Jow Sfttt 


GROUP [DM GROUP IOM 

Mte Nt> MU 201* 

R ft It R 


UNAVTMOnSEO, fMMeGULW, fRUITUM AMO WASTEFUL 


H.1 UniMMiMoptnilw* 



Uuuteorlaod ecunJtn outranl vw 


C«ilWiikrtBOHf«bi* ntKmoIMFUAiiefcn 22 

Bate-o* canted fcmrd 


HW1M1 




14 74*606 




i*Ntm 




ln ri AK 

TWi aigiandair* folate* in lh« Iroptemw t tednn of Lamar ThJiato EkA WMw Supply Seham* [L.TBWS3) ahkft to fundad through Ft* 
R&G toot to* 3*P*rtr»*n| rf Water and SaflrtaCoa V* *M* adocatkm far toafrancUl yaw »n AUtert and w* later *4 lack \s 
RMM.lhiaJt«diMt(KtBndh Ih* xf jayoantbudoat, wwwatlhiKiHt*<i4b*A«MlrA^*iNoonrtnMtilr! 

tenroof *)9#rtdtaf*w0tealroadynad* (on It* fcaate and ftanby mating H notaaay to out dovwi on curtate prcjnt* 

wtfrin ft* lTBWSS. 


Aatfen blnti 

CotncS hM conddwad ond rotad ttew* of »fcc mq»andtur* and •»** raterrad hart to UPAC far (Urtear wn^ Any farihar vA** of b* tafcan 

wen MPACa reovnnantetun to Coni 


MJ FnllbH inf wuWul ikpifritun 

ffaecnoMakn o# fruMte** and «UU awondbr* 

Bff«te«brou#ifaftwd 76 004 T««M 622114 M*1U 

Fndttea* and woatafii avandten eunwO v*ar 136311 70 204 

C#rB4*d *i -rracovwtfcte and written off by Crxrd In term of V-MA 

aaetton22ffiacouaradborn raapondfateoBdala _ (43 673) _ (TB W4) _ftOJOW)_ESJJil 

BatVK# opfftedfaftwd m» ■ 76 264 ~ 7i~ftt 

Mfint 

tote act p*y™m arlatog out of a dapLtowfte Sappt vm on ott da* artafHng amir aaoounte that had nd b**n Mod by Sappl batwaar Fafactwy 201* 
and May 20 M. 

totaraatlanodby SEMSCORPatei wateron 14* payor ant of n«slc*4 -i raapaetoffra* aajfe aamteaa. tha datey n payman ofthaa* bvefoa* wa* du* is a 
tong atwdrg tfipiA* on tw oi*tud of bCng for fra* basic aanfcai. 

tetenat kfad bv K n raOLhjia Local MunfcfeMIlv on tet* entrant of alact-'khv aceow* a. 

Action taka* 

Th* ruriefaiflty la in fra proem of imptemordno mua**** that an aim ad *\ tentno aromd fro arm ttteia of munttpot Inancaa Th* ? rr ary ot**cfv* ia to ooav* 

Una-ida fctetatoaKMy w* h«aihy faiidly olttemiAdefruflty. 


CouneS |u* oenadcrod and noted tern of toJfoaa and waatefU arpwiilji and ter r*Srr*J nam b MPAC ter hrthr ■cn.tny Ary 
fudw adon wSbaMcan ifcti M^AC a racoon and*[tor lo Goltc 


Roe'rwJJaben of iraoubr auMroirur* 


Oateno* bnouaM terwaid 

Inaqular antanfflur* ralaad In ewaot v**f but rttetnfl la cute* v**ra 
teuter ueardUmoutanl vow 

Cortf «d by oojrofT a* (rraeovarabte and v^Mten offj ten** of WUA aedten 3? 
l)t*0^or te^widitijr* awing oonddaralon 
Pweantaoa written off rfurlno lha parted undar rwdaw 


53466 667 63 4356*7 6 522 273 6 322 373 

246660238 346 6*6 256 

7462* 6*2 74 626 246 44 025 327 45 026 027 

("43 7131 (142 713) 

475203 y* 47* 241 m 63 4*6 6*7 62 466*67 

1 W 9% 0% 6% 


InaMtnl 

TharalateateteipondluroInciAradoniaidrDoaocurity Mnteaa. tea ccebact aqvod te Jdy 
2018 after wtrefc eenlracf aafianatona «m apf* lrl udl tea aBowod parted of 6 monte* «aa 
*tete»^lad-te*muiicipaWy haa alno*onbw^*don oroounenord proc*i**a and tr*M *r* 
now at bM onfuotibn rim 

Amaad* to lha aupfAw* te awvte* of fi* atetarVal* te fraiWteton* lh*l ocotarad bMwo IhokutoUten d 
2617/2016 audO, urteh *• vNly waa 'abte to pay. 


16,4 Oovtatlon* 

tJ**4*dor* wan apprond fri term* of rogUatten 26 of dia Supply Chain Mcnagacianl Poicy; 

Total walua 33123 268 


27 243 431 


THg~av 


Th# nofcr ly of innaactona trat w*n doavftad M da da ton a wan ter pant Hr* (water tirJiar. TIB), nnhan^il pump and d*cfrcai pLant rapaba, aupply 
of molar pirifcalten dtenlcda, o^gcf eonaunar ataterranta, ad hoe aocurty asvtoaa tagjaate M Inaa tranaoctona hava now b*ao oddnaaad 
through tha oontrastalpanda of aarvtea prafdan vatd tor teraa yaan TMa parutteenuact wfi addmaa tha urtuatilabta dadaiona vAieh otm cnalad 
Inogufor Dptedhr* Th*a« tauiffCM won often at a rotuN of omarooncy raquaate from N Uaar Oopartnanti, Furlhar aJaHfcmt tnrtedon war* In 
raopad pmfwaa of iotlna macHnw after tea Murifg|paily had reotevad grant hJ^drg froai COOTA te procura prart 




7S7 


4f 



(LEflJH! DISTRICT HUMQPAUTY AlAlT* CMTMLIU ENTITY 
MOTES TO THB FINANCIAL 0TATEM ENT* 

Fartha parfodandtd 59 Juna 20ft 


ADWTTONAL DWCL08URES M TERMS or MUNICIPAL FINANCE 
0* lUMAOUEMTACT 

MlI CwtribuHwii In wgwiml latd a w nwiiri 
Ocarina bdvica 
Cgnrrf wbw W iwn 
AnnrlpiM'CunN 
Adfciaoaanl 

BkIhh ur*cld Rndodad Ni ^iHm) 

UJ AndUfbaa 

Opart* Ntanc* 

Currant y*tt mutl 1m 

Am aud p«U • eumnt vnr 

Mama imiM pncfufed In payiMaa) 

M S VAT 


OROUP 

no 

CROUP 

ItMM 

2010 

2011 

Oil 

0010 

ft 

ft 

ft 

R 


2 IM 717 
(2 100717) 

2 100 717 
(2 10* 717) 

30913* 

1 045037 
|1 045657) 

_poo wn 

394 192 
t warn 
(1 0499*7) 
(309100) 


*043 009 

_(3 043 60S)_ 

3 277 307 
(3377 307) 

2 HI 331 

_(2 041*3.1) _ 

26*9 937 
(2W6 637) 



VAT inpii (Wvabto *nd VAT oApiA pa^W* «* itowi In note 13 Alt VAT ratamt Iw* b**n tUtaiftM to th« dtf* L*«ueftciA <ht y«*. 
*44 PAYE and UlF 


Opantabalinea 
CunwiI yw pawn* dadueOona 
Nasri mM - auriam av 
Anauilpatd - pmtou* pvt 
Baton* Ulf4 u (infudad In jM*iU*a) 


2099532 
15 075 747 


(32*00063: 


TKfr baanca raprain to FAYE *rd J F dtd^dad'n Am* 2010 payrol.TW» amnunl ana paid in AJy2010, 


201*607 
31 £06672 
{29 M0 720) 


(4 230507) 


45*0150 
33 000 207 
(30 *17 769) 
4JMJ 




4 93*2*0 
£0 632207 
(37 aI *0 




IM Panalon and MtdteaJ AM PadUctlona 

3 572**9 *470*21 3972 20* 3 072203 

47 510233 44 0090*0 43 097 07* *2 300657 

(49 437204) 142 0*0 307) (4*004709) -;M 020739; 

-g vi pi.i_Egsigi_nmwi> 

1174 030 2113403 2 072m 1470021 

Tha balanoa lapraaana Paoatcn 0 UadfcaJ dd daduttof «i AwuOOlO payidL Thaaaanaufewvapritlin My 2010 aicapl ferRAnAtoiwaa paU to than onto of daductoi 
tdMchi* Jin 3010 . 


Ml CamctaPa OTMf popownar aooovwto 

at at *1 Junt ttl* 

Van WtiyaOJ 
Ceunoffor V08HANDU 
Cowtdfer VS SI NO 
CouhUot M>COBE 

Total CaunaMa* Ann Camntr Ateauda 


MLT Malarial (oaaaa 
3471 AutHnpdmMiUMiaa 

Tha pirnil yaar impartin'* la a raaJI a t a0atog jhfraiOuckra dua id 4a impact et dneugM 


39.71 DaM fcnpalrmant Joaaaa 

AVwugN 0H ***** t 0 *aclCTi hat aOsMiy topmad eortparao la toa prior yaar, mnii 
naa toeurrnd Tatoto dab< impawn an loiaaa vrtttoi tff *Q*tnal Iha irnWcr fcr bad AMa 
ThbnmaMyacinaiAorrnattctadi'iaetrvaaemiOilbal ara aeeumidalng !/**aa1wfJi 
n> Murajpondfo payrtanta, panataw aoeountt and dacaaaad conaimar acumb (hat ara 
aeeaniAat'ng SrdaraaL Thii witaaffhaa taauMd to a dacraata to ccmaaardtbnri and 
provide* to bad dabi*. 


(67OOI10) (0130 004) 110*12 1100*3 


1710 W 3 1711 Ml P 015 3071 (3 015107 ) 


4M *03 142 142 

3j 1 327 

tS:4 2614 

791 _2£l __ _ 

4 417 4407 141_'U 


ONddbdiMa 

Cu™t yam payra* daduedana and Cwnca Comribudona 

Aawunt pda * ouiant vaar 

Auteui. paid - prwtou* yaara 

Saimaa unpaid IbduM In ptyaHaa] 



iUMBE ootwct uttocwornr aw it* controlled entity 

NOTH TO THE FINANCIAL CTAIOIENTS 
For tlto parM imU M Jin 1011 



Unto tot fUfc fc—) 


OflOUP 


2 *ia 

R 


OAOUP 


nil 

R 


ION 

Nil 


6* 

24% 

1* 

7% 

62% 

ieo% 


046 697 

4 69* IIT 
190 610 
MM 077 

M£ML 


ISO 69 T 
4 548*17 
15*610 
1 106077 
11100003 

ffimw 


£404 472 
5223770 
37327 

* Ml 071 


2464 472 
5 225 770 
37 027 



UflOtlMt taalaa prfoa par IdleMra * ranto) 
Unto feat fowtfaa* erica mt ideOl* - ranto) 
iMutoatfearcartoga) 


107002 0U 
02007 070 
01 74% 


107 002 300 
02 007 ITS 
§174% 


M 300 609 
4C 402900 
40.00% 


03 300 006 
40 412 610 
40.00% 


‘ftwtolritdOn tow «rt 'n airly** lo Itgil cemKtg* mair into (igNrg IntaatusL/a). naarwt aumto n aid mMc* cannKlcn too. A *n yur aMiale nutv 
itolyl'iiaJietoalwntwnwwtohMbawadcpiNbytoBiiridpaOiteadJfwNtintlii) 


Naa«amptomMWi«««Uofi«9(3)a/U»Mw^d Rnmtlla 
1M Paytntnta ti cndUo* vMhNIa^i fiw At* ef r*dR 


AinHr at toy* upaid cntocra at 33 Jjv 
4v*nc* nunbar ot day* unpaid «*Hvi toing l^a year 
VNLacf cnadtottngtprid Kdtotttoyaduing Hyur 
Pan»rtato ofcrarffert paid *Hn » toy* 


2*1771* 

[201Z/1L 

201771* 

13*17710 

02 tort 

02 i 

67 dava 

117 dart 

4* toYi 

40dm .. . ... 

OOdava 

<3 tort 

7* 969 664 

70 GAS 06* 

. 75762 SB 

d 71 7S2 Mfi 

n% 

S3& _ 

m _! 

\^S _ 


ThalnaMky to pay cracOm <n Oma b a writ d Iha oath Ito* chatongM (umnfy fcalr? faced by iha iauifct**r mid Me t» 

BnLad to to broader Inane Nattily eh d u e. Com* NoM a friandH kinittto HpNiw O tlM plan In Dacantw 2010 whid* 
H currant? being taipla-nartod In tanna of fra Armndal bmaroud atratogy, It ww rniNaagd that ft* niriNpalty wOd b« tola to 
tom I* PtfTWd ind ufr itl* ftmwtai ahuatlan lift a period a* tree yean wdti edectUrwi Oocenter 2414 There era tnprortmia to to 
«m •CdenordpoNng«dlc*i an L'me«ton comparing to »*poNoua year*. Oh averago toe torgeat it toe* to pay crodtan during 
aoigflnandai yarn an* 44 toye compered to 49 ddya Arfeg 2017/16 in tern* ot Iha lumber ef day* oalatotad at >aat and 02 day* 
hi r%»rtad at 30 Jum 2010 eom pared to 07 toy* In Juna 201 to 


1*1* MUlaitel FarawLaaaaa 

Total Feie* Llabtoy m al 50 Jm 2019 2132 107 2132107 ■: 

Nai Cwiufa tva Force Lee*** f 72 690 ) |72 M 3 > 

Tuntod ferae kaaaa triN* tom to VScraaeA tieanaa %at uttoly waa Am to impacted adwaa OuetoaOcna In Iha rind acMtt aMchanga rata 

Tha Bpen nan at 30 ton* 2019 wa* 14.1467 motto iha tpot ni* fceneae by 1% the foreign totality *U ba R2 15351601 erd Iha loi* «* ircraet* to R73 27464 

ShnJd 4* apotrata deeraaaa by 1% (ha Forwlabrty wl be R 2110674*7 and tie =ai** Iom am tottaaaa to RM S 24 M 

Ptmaan Latittrfnctae*# R 2 132 196 04*1.01 HU 133 31601 

Foreign loaa {neraaaa R 7265004* 1 01 H773 273J64 


KT CAPfTAL COUMITHKHT* 

0.1 CenimltMarm to mpeet of oaaNtal aocgendNiira 


- Approved and <»oto rated Par 

HI HI 3M 

mm 2*4.. 

1U 1*4 Ml 

0*2*4*94 

likaatnitiiM 

j 202 *>2 WO 

1-:- 

2*2 MI 249 

"*Sw»e 

430 2*4 054 1 

CarrmUy 



- - J 

• AtonvH Ini rud yet eunlnittd for 





ttoikucin 

1_ 1 



.. ~h 

Total 

203 W2 296 

262 Ml 244 

4*1 264 664 

maaEsL 

hlaetoantoma baInane** Iren: 

■ Etomal Loan* 

- Gowmnmt Grant* 

2*2 M2 244 

282 442 243 

460 204 490 

418 264 031 

■ Ownreaeiroae 
- Furdng atJ toba Mimed 

2«a 4*2 203 


oofinad” 

Of 214 *01 

ofbutiokal comm mi ext o 

2*1* 

2*14 

2 01* 

2211 

Csnri 'lnanta In mead (Feawailonal asmdrettura. 

• Act*cred and oontrated tor 

7 3*0 414 

7344 816 

Raatatad 

1**2f 04* 

Raatatad 

14 42* Mo 

Infraatnictoto 

7 300 614 

7 300016 

1**2* *4* 

14 420 444 

ComABurdhr 

- Approved bul net yat mtr«W tor 

to^vekm 

CtnwriT 

Total 


i . 

_<»*”** 


TH# awandton all ba Mranead a« totom: 

OranUmdto 

7 3*0 014 

7 an ns 

IS 43* 940 

1* *1**40 

Couid funtod 

EntaoiN Loana 

73M3U 

_ mm- 

i*t*a*4» 

1IU3M* 

TOTAL CONTRACTUAL CON UfTMENT* 

270 j*110* 

2TO Ml 110 

307 211 004 

*07 21 *04 


i VAT Induei™ 



ilemse otrrracT iitMOPAijiYAHD n* eowwaj-io entity 

HOTtl TO THE R KAMdAL ■TATlMEKTe 
For fesparfed anted #0 Juts 2011 

CROUP )DK GROUP I OH 

1010 2t<» 2£H# »11 

R R II P» 


as EMPLOYE! BENEFITS WFOWATICN 
31,1 Daflnsd co n b fcutian pfen 

Tha fetoferg v* ftflnad CMdribuMon plans: ffefet Jdid Mjrivpal Ftomion Rnd, Nafond "raasury Oowmu;«i'.Eniptoy**P«tenRjrd SALAParaton Fun* and AAmfepaf 
CM cfcf i RwiiflPi Find, T>«« wdfcufcn h«w bdifl tt#>«ri*ad. 


30.2 OthsrLonfrtonabaMfltpfan 

jcng Mvtei mnUi«« proved lo unpayw who hHwi evtfn pmtittinM nMon*) ot m nutea mtWfl tha rm W ct p sity 

Tha fittHdpatoy'i Ml obrfcalon In 'optctoTlarg trvlot awards Is fra amount of totura Mrtlf thsl *mptoy**i hava samad r tdvm tor Mr sonnet h In currant and prior 
parfete. Tha bonaSt Is dbcnntod to tetanntos it praotnl vatoa and 9w tor vdLaof any rtelod oatato 1* d«du*ad to ddoaha tha nsl otlgifan. 

Tha dtevdrat* 1* fe ylatt to M repot ng tela on AAcrsifenlad bands feat havo mfeurfey dfeas appradmateg tha tarn* ef fea nainlcfeafly» ottyteR* Tha calculation fa 
psrfafin ad using too prersdtd uril cradft madnd. Arty actuarial Qtint and kvtao ara ncogrdsad in surplus or dtfctt n Ito ported to My visa. 


Tha Mapotoard «to*o canfed out o Sts*, toy vatoofton oo at 30 Jtow 201*. 


Tha prinetosi actuarial aawaiptkn* uaad war* at fadewt: 

Dfaetet roto P*r ■rrun 

MtoJonrota 

Hat a d s ed v t scourt rata 
5t(Khnar1i Mateo faqual to salary Wlatfanl 
Average radmewt aga 
Moteter tettog toidowaf 

Ptroanfega of irKtarVte nwmbr* dtdvrlil Mora r*9r«aiarL 
Ago 20 
As* SO 
>4*40 
Ago 60 
Ago 66* 


Tha sattunta nesgrfead to ra STi- - wV ef Financial Ptoaffen vara 
dataminad as fce'rg Mta pnaaant valua o' f* obSgattone 

EMPLOYEE BENEFITS Icantfnuadl 

Vtouanart to tha daCnad ban aft oMgatan » h kfw. 

Balance at hagtoffeg of fe* y*a> 

Current wvre* coat 
Irttat all scat 
Benrt payments 
Astoerfc ‘«a'ntV«*aa 
Eatanca at and d y*ar 

TN torgdto employee teftsftt* :■ as to te* 

Cjwi porter* of tnptoyoa banalls 
Ena'gyaa ban (ft ob oaten 


Tto saiute recoptead to fee Siteainafdefnnarcial Farfornanee ware as fates* 
Conrad sanrcs ocat 
totoraatceet 
Aotoadal gstoe)foe4aa 


6.5414 

6,64% 

0.04% 

004% 

0J3* 

0.23% 

023% 

• 23% 

m 

2.27% 

127* 

127% 

700% 

7.00% 

7,00% 

7.00% 

03 

N 

03 

03 

SA 55-GO uRmata 

8A 06-00 Utirast* 

SA 66-60 irtiula 

SA 65-00 uSmafe 

40% 

40% 

405s 

4C% 

25% 

29% 

25% 

26% 

12% 

12% 

12% 

t2% 

4% 

4% ■ 

4% 

4% 

2% 

2% 

2% 

2% 

12 067 £29 

12047 224 

0U« 117 

• 620 017 


0 920 0!7 

0 326117 

6 294 700 

0 293 706 

632131 

•02 631 

734000 

73*000 

701634 

701 634 

704210 

706210 

1736 496; 

(73# 450) 

3G04TVI 

>M0 m: 

1570TB4 

1 675 164 

434 714 

434 714 

73 007 230_ 

12 007 210 

• 510 HT 

a 620 51T 


1 404 063 

lajmzar 

1 404 003 

n ixs tti 

730 450 
arFrjoi 

TU4S0 

mu 

ii xn 

HMrl» 

IIHH7 

guaaiT 

•32 331 

791634 

1 6T6 104 

032 531 
701 #34 

1 575 104 

734 D00 
706 2-0 
424 714 

734 COO 
7C3 216 
424 714 

zzzn&Sszzz 

rarer 

1 *00630 

1 #00 630 


49 RELATED PARTIES 


Wan oars of hay nansgamaot 
CanMtod \Arisrd Grily 


Sacoon a f mwitean 

fente ttfrfcf has «100*Mw*V to femAa 

Oo«-a fcp n*anr Eniorprte (Pty) Lfd. 


Conpewter aratcri md aDtar key manager sni 


Aamad owad by Usmb* Enterate* Inetodad to od-ar patterns 
Anted by llmfce Enterprise toefaded to obw r*c*tobfet 


Ttonaacttna MVi Erferpilan iamb* Davatofeaard Aa*xv 
Gibi*. Mng from tha oarant far LEO prefects 


fe>arad5arvfaaa<Car«|tuttorta by fecal nutepaHtfea towarda ihad**alopnard pfewtog sh 


RaAKtomfe 73124 

#71 761 

30 *47 M2 
2 117 WO 


(040IM) 

W«1 


24 666*80 
4 7M045 


40.1 STAFF If EH ESI: R PDlay 


Eivaraaa far tha yaar 


11107IM « *1170*1 


Hatora of tranaaoterv 

Tha arfptoyaa had a fecthar had a shara to tha company toat was towdad a oordraet to prmdda capfed prefect ea'sittog larvfa* to fa* mundpahy. 

41J ITMiGIISEfblMdihfeU 

EsflamEisira: 

Ewaomfortayw Mi *44 '+*■*« 


NskntffeMKtw 

An srapoyga had mlatera afto a aaretoa prmddr vfeon pnvtdad sanifeaa to toa nuMpMy. 


142 te* 142 004 ItWm 11187 233 


Tola **Kia rf 'salad partial 



H.EMQE DNtJUCT HUMCtPALfTY AND ITS CONTROLLED ENTITY 
NOTE* TO THE FIIWKIAL ETATOItHT* 

F*1ha period anfcd 30 Jim VUi 


41 COWTlNCOir LIA 3 HJTY 
4 t ,1 Non CowtrocdMi 



DM GROUP (OH 

101* 1414 291# 

H n R 


leon Gonlnirtlan | InWaaat CJwroaa on iimr payiMTto A atandfeg Mnra 


' 03*033 1039033 


TO* i« a MtlerW mattw v**M UrcreanJ wafer aanetfonad oanaYucfc* of aptop para dtra of wte* tw ojnrtvcfan nato wan to 
t* ***** OTWigt ibt dtonH bind cm fraprtocipfeo/croaa Bft ri tofaa ttiln #a raiaddpUty yayfeualy daputad H» etw?* 
gnlbM«N4w»Mii4ilMb*nRAw*lh*ichKMinqiitHcnMnNlMNlwFfHau|i0y|^M^tolh«RMd Tha 
inattv fwf bwn HNrnd to SAiClANr rftodtal'on vtd SALGA nooninn^ Ini M tt« nukipRilM toomHrs IrHn Uw«a(ri wtar 
dUtritndc* aytlan ahaid mUfaufe (bwit on fra ctwi aubHRaiton Mhafefe) PwU tt» wratuefen mm oftto aprtrg ^wt 
dvn but Mon* dying to. on agrarawi nuM ba antarad baferan tfw too Batad on SALQA'a raeomiaandatoa Larrfaa 

UaffUftfoileloalCoi^hBaaubiaferanOyraarir^tMprartxra atoned daeMwtnl to (n raadnSno tfe dacMen, *a 

««w*U oflteaf w*i than nwidafed So facSfefe alflrtoo ef agraamantwta Utoganl wafer which ahaJd feta hto «rtafdara*on 

alprMfoostNrgn, famrperaftig* pavnw* prafeouaTyirada tfgddaternltirg Ife fcdww pd*i»*nl pfen M ft* bnacf 
nnVOdfcocariptR'oooTlItoBrin^fwe-UoMw**!^ «ianaUar*»*atiivj)dar dacuufenawOh Ungwl wafer (ntorai* ef 
fvW’itaQ fta vwnwt 


C4ntfn#antLNUtttr N**d an Ihfemtaaiauirta cfcatgad by Icon 
Caawtmctfon on affair pqnwnti A aianrfng tima 


41 ntKKAMOCNUr 
4M Unbn tn^flik •xkmin 

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257 



GLOSSARY 


, Accessibility 

Indicators 

Explore whether the intended beneficiaries are able to access 

services or outputs. 

Accountability 

Documents 

Documents used by executive authorities to give "full and regular" 

reports on the matters under their control to Parliament and 

provincial legislatures as prescribed by the Constitution. This 

includes plans, budgets, in-year and Annual Reports. 

Activities 

The processes or actions that use a range of inputs to produce the 

desired outputs and ultimately outcomes. In essence, activities 

describe "what we do". 

Activities 

The quantity of input or output relative to the need or demand. 

1 Annual Report 

A report to be prepared and submitted annually based on the 

regulations set out in Section 121 of the Municipal Finance 

Management Act. Such a report must include annual financial 

statements as submitted to and approved by the Auditor-General. 

Approved Budget 

The annual financial statements of a municipality as audited by the 

Auditor General and approved by council or a provincial or national 

executive. 

Baseline 

Current level of performance that a municipality aims to improve 

when setting performance targets. The baseline relates to the level 

of performance recorded in a year prior to the planning period. 

Basic municipal 

Service 

A municipal service that is necessary to ensure an acceptable and 

reasonable quality of life to citizens within that particular area. If not 

provided it may endanger the public health and safety or the 

environment. 

Budget year 

The financial year for which an annual budget is to be approved - 

means a year ending on 30 June. 

Cost indicators 

The overall cost or expenditure of producing a specified quantity of 

outputs. 

Distribution 

Indicators 

The distribution of capacity to deliver services. 

Financial 

Statements 

Includes at least a statement of financial position, statement of 

financial performance, cash-flow statement, notes to these 

statements and any other statements that may be prescribed. 

General Key 

performance 

After consultation with MECs for local government, the Minister 

may prescribe general key performance indicators that are 

appropriate and applicable to local government generally. 


204 


758 




























Impact 

The results of achieving specific outcomes, such as reducing 
poverty and creating jobs. 

Inputs 

, All the resources that contribute to the production and delivery of 

outputs. Inputs are "what we use to do the work". They include 

finances, personnel, equipment and buildings. 

Integrated 

Development Plan 

(IDP) 

Set out municipal goals and development plans. 

National Key 

performance areas 

• Service delivery & infrastructure 

• Economic development 

• Municipal transformation and institutional development 

• Financial viability and management 

• Good governance and community participation 

Outcomes 

The medium-term results for specific beneficiaries that are the 

consequence of achieving specific outputs. Outcomes should 

relate clearly to an institution's strategic goals and objectives set 

out in its plans. Outcomes are "what we wish to achieve". 

Outputs 

The final products, or goods and services produced for delivery. 

Outputs may be defined as "what we produce or deliver". An output 

is 

a concrete achievement (i.e. a product such as a passport, an 

action 

such as a presentation or immunization, or a service such as 

processing an application) that contributes to the achievement of a 

Key Result Area. 

Outputs 

Indicators should be specified to measure performance in relation 

to input, activities, outputs, outcomes and impacts. An indicator is a 

type 

of information used to gauge the extent to 

which an output has been achieved (policy developed, presentation 

delivered, service rendered) 

Performance 

Indicator 

Indicators should be specified to measure performance in relation 

to input, activities, outputs, outcomes and impacts. An indicator is a 

type 

of information used to gauge the extent to 

which an output has been achieved (policy developed, presentation 

delivered, service rendered) 


?S9 


205 

















Performance 

Information 

Performance 

Standards: 


Performance 

Targets: 

Service Delivery 
Bodge! 

Implementation 

Plan 

Vote; 


Generic term for non-financial information about municipal services 
and activities. Can also be used interchangeably with performance 
measure. 

The minimum acceptable level of performance or the level of 
performance that is generally accepted. Standards are informed by 
legislative requirements and service-level agreements. Performance 
standards are mutually agreed criteria to describe how well work 
must be done in terms of quantity and/or quality and timeliness, to 
clarify the outputs and related activities of a job by describing what 
the required result should be. In this EPMDS performance standards 
are divided into indicators and the time factor. 

The level of performance that municipalities and its employees strive 
to achieve. Performance Targets relate to current baselines and 
express a specific level of performance that a municipality aims to : 
achieve within a given time period. 

Detailed plan approved by the mayor for implementing the '■ 
municipality's delivery of services; including projections of the : 
revenue collected and operational and capital expenditure by vote 
for each month. Service delivery targets and performance indicators 
must also be included. 

One of the main segments into which a budget of a municipality is 
divided for appropriation of money for the different departments or 
functional areas of the municipality. The Vote specifies the total 
amount that is appropriated for the purpose of a specific department 
or functional area. 

Section 1 of the MFMA defines a “vote" as: 

a) one of the main segments into which a budget of a municipality is 
divided for the appropriation of money for the different departments 
or 

functional areas of the municipality; and 

b) which specifies the total amount that is appropriated for the 
purposes of the department or functional area concerned 


206 


260 



















APPENDICES: 

• ORGANISATIONAL SCORECARD FOR THE YEAR 2018/2019 

• OFFICE OF THE MM: 2018/2019 SERVICE DELIVERY AND BUDGET 
IMPLEMENTATION PLAN 

• TECHNICAL SERVICES DEPARTMENT: 2018/2019 SERVICE DELIVERY AND 
BUDGET IMPLEMENTATION PLAN 

. FINANCE DEPARTMENT: 2018/2019 SERVICE DELIVERY AND BUDGET 
IMPLEMENTATION PLAN 

• CORPORATE SERVICE DEPARTMENT: 2018/2019 SERVICE DELIVERY AND 
BUDGET IMPLEMENTATION PLAN 

• COMMUNITY SERVICES DEPARTMENT: 2018/2019 SERVICE DELIVERY AND 
BUDGET IMPLEMENTATION PLAN 

. ENTERPRISE ILEMBE; 2018/2019 SERVICE DELIVERY AND BUDGET 
IMPLEMENTATION PLAN 

• ENTERPRISE ILEMBE 2018/2019 ANNUAL REPORT 

• ENTERPRISE ILEMBE: 2018/2019 AUDITED ANNUAL FINANCIAL STATEMENTS 


207 


261 


C2C 



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ORGANISATIONAL SCORECARD 2011/2410 - ANNUAL REPORT 



































































































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Enterprise iLembe Economic Development Agency 


info@enterpriseilembe.co.za 
www.enterprisei lembe .co .za 



enterprise ilembe 

(CftlOV'C OEVeiOPWtNf AOtNCr 


290 














2018/2019 AR - Final Draft Jan 2020 


CONTENTS 

CHAPTER 1: INTRODUCTION & OVERVIEW 

1.1. Overview of iLembe District M unicipality 

1.2. Foreword by the Chairman 

1.3. Foreword by the Chief Executive Officer 

1.4. Executive Summary 

1.5. Strategic Objectives & Functions 

1.6. Audit Committee Report 

CHAPTER 2: SERVICE DELIVERY & PERFORMANCE HIGHLIGHTS 

2.1. Key Successes and Challenges 

2.2. Projects Undertaken 

2.3. Capital Used 

2.4. Job Creation & Skills Development 

2.5. Performance Management 

CHAPTER 3: HUMAN RESOURCES & ORGANISATIONAL MANAGEMENT 

3 . 7 . Organisational Structure 

3.2. Institutional Transformation & Employment Equity 

CHAPTER 4: AUDITED STATEMENTS & RELATED INFORMATION 

4.1. Financial Statements & Related Information 

4.2. Report of the Auditor-General 

4.3. Chief Financial Officers Report 

4.4. Audit Action Plan 

CHAPTER 5: FUNCTIONAL SERVICE DELIVERY REPORTING 

5 . 7 . Service Level Agreement 

CHAPTER 6: ANNUAL PERFORMANCE REPORTING 

6.1 . Service Delivery Budget Implementation Plan (SDBIP) 

6.2. Highlights on actual performance 

6.3. Conclusion 



2018/2019 AR - Final Draft Jan 2020 


CHAPTER 1- INTRODUCTION & OVERVIEW 

1.1 Overview of iLembe District Municipality 

The iLembe District Municipality is situated on the East Coast of South Africa in the Province of 
KwaZulu Natal. iLembe District is bordered by eThekweni Metro in the South and linked to King 
Cetshwayo District in the north by the coastal highway, which is a key corridor in the region and 
is bordered in the west by Umgungundlovu and Umzinyathi Districts. 

It is located between Africa’s busiest ports of Richards Bay and Durban and is in close proximity 
to the King Shaka International Airport and the Dube Trade Port. It is the smallest District 
Municipality in the province with a total population of approximately 657000. The municipality 
covers 3260 square kilometers and is divided into four local municipalities: KwaDukuza, Mandeni, 
Maphumulo & Ndwedwe. 



The economic sectors that constitute the pillars of iLembe's economy are the following: 
A Agriculture - This sector is characterised by two main distinct types: 

o Commercial agriculture, such as sugar cane farming along the coastal strip 
o Subsistence agriculture in the rural hinterland and inland areas 


> Manufacturing - This sector is mainly characterised by the following types of industries: 


























2018/2019 AR - Final Draft Jan 2020 


o Primary sector comprises of heavy industries, such as sugar and paper mill production 
in the Isithebe Industrial Estate in Mandeni 

o Secondary sector activities include light industries that are prevalent throughout the 
district and with a focus on the rural areas of the district as well as along the coastal 
belt. 

> Tourism - iLembe is one of the prime domestic tourism attractions in South Africa due to its 
favourable climate and its excellent beaches. This sector has consistently grown in iLembe 
and offers a variety of tourism facilities that can be categorised as follows: 
o Cultural and heritage tourism 
o Beach tourism 

o Nature-based and adventure tourism 

r Commerce and Services - This sector includes the following sub sectors and is found in all the 
main urban centres throughout the district with specific reference to the towns of 
KwaDukuza and Ballito: 

o Wholesale / retail trade transport / storage communication financial / insurance 
o Real estate business / community / social / personal services / government services 

1.2 Foreword by the Chairperson 

As an economic development agency mandated to drive economic development and 
promote trade & investment. Enterprise iLembe has to live up to the expectations of the citizenry 
of the iLembe District, this necessitates that, as our way of life, we support open public 
discussions, we are responsive to the development needs of the District, we are conscious about 
the development impact on the environment and that we are trusted by our funding and social 
partners. 

The agency is confident though, that the triple challenges of unemployment, poverty and 
inequality which faces the district and the country as a whole can be overcome through 
collective collaboration and planning. Key partnerships between all government sector 
departments at all spheres as well as with private sector and the communities we work in, is 
critical for economic growth and sustainability. 

As the Board of Enterprise iLembe, we are mindful that as a government entity, we need to work 
together with the private and business sector in taking the district of iLembe to the next level of 
economic growth; where the ease of doing business will attract new investments, where the 
regulatory environment allows for small businesses to thrive and where our entrepreneurs can 
succeed. 


293 



2018.2019 AR - Final Draft Jan 2020 


If is to this end that during the past year. Enterprise iLembe has entered into favorable 
engagements and discussions with key partners to promote and package investment 
opportunities in all sectors and will continue with this drive. We continue to strive to build and 
strengthen relationships with all stakeholders as we believe that together we can build a 
sustainable economy in our district, ensuring a better live for all our people. 

However, in reviewing the performance of the Entity through the Service Delivery Budget 
Implementation plan, as a Board we are pleased with the overall performance whilst conceding 
that there is still a lot more that needs to be done in order that we address the triple challenge 
of poverty, inequality and unemployment. 

The appointed board members collectively bring much required expertise and values to 
Enterprise iLembe coming from backgrounds such as law, marketing, HR, Investment Promotions 
and Tourism. 

Board and Sub Committee meetings are held at least once a quarter and the attendance 
thereof is recorded as follows; 


Name 

Board 

LED Investment 

HR Finance 

Khanyisani Shandu 

6 

4 

N/A 

Cobus Oelofse 

5 

4 

5 

Thandi Nzama 

4 

2 

N/A 

Dumisile Nene 

3 

N/A 

2 

Noluthando Mngadi 

3 

N/A 

4 

Zakhele Gumede 

5 

4 

2 

Patrick Mngadi 

4 

N/A 

6 


Appreciation 

Let me take this opportunity to express my sincere gratitude to the board members for the 
professional manner in which they discharge their fiduciary and other duties to the organisation, 
through their collective and individual experience and expertise. 

I would like to also share my deepest appreciation to the management of Enterprise iLembe led 
by the CEO Mr. Nkosinathi Nkomzwayo and the entire staff, for the manner in which they have 
dedicated themselves to work for our people and to serve them in a manner that says the 
principle of "Batho Pele" is deeply entrenched in the organisation. 


294 




2018/2019 AR - Final Draft Jan 2020 


Lastly on behalf of the Board of Directors of Enterprise iLembe we would like to thank our 
shareholder, iLembe District Municipality for their support, leadership and guidance. 

We are looking forward to 2019/2020 as we strive even harder to ensure that our vision to make 
the iLembe District a destination of choice for investment, business and tourism become a 
reality. 



Khanyisani Shandu 
Chairperson 

1.3 Foreword by the Chief Executive Officer 

The economic climate has changed and becoming more challenging over the past ten to 
fifteen years. Local businesses are considered to be an important long-term and key driver of 
economic growth, innovation and reduction in unemployment. They offer significant job 
creation potential and support large numbers of livelihoods. The significant participation and 
meaningful inclusion of small, medium and micro enterprises into the mainstream economy in 
our province through their own enterprises will be one of the key game changers. 

The 2018/2019 financial year reflected great accomplishments of what the entity wanted to 
achieve at the start of the financial year focusing on planning and implementation and also 
making great strides with engaging with various stakeholders and forming key partnerships. 

Enterprise iLembe held strategic board and management sessions in order to plan and prepare 
for the five-year institutional assessment and capacitate the organisation to position itself 
effectively as a sustainable economic development agency in iLembe. 

The Entity continues to focus on the following three strategic pillars as DNA of the organization: 

Financial sustainability of Ei 
Business Development 
Stakeholder Engagement 


295 



2018/2019 AR - Final Draft Jan 2020 


The strategic repositioning and focus on the three pillars has resulted in ensuring that the Entity 
addresses some of its weaknesses and threats, thus positioning itself to deliver efficient service 
to its clients. 

The Entity continues to redress imbalances in the economic growth of iLembe District influencing 
positive local economic development to prevail in all sectors of the Entity. 

The Entity has engaged with major stakeholders in the provincial and national level, formulating 
relationships to foster economic development projects and flourishing in media engagements 
to promote the iLembe District tourism products and investment opportunities as per the vision 
of Enterprise iLembe. 

One of the key successes was that the entity ended the 2018/2019 financial year at a revenue 
of circa 49% more than original budget. This is as a result of concerted effort to grow our revenue 
base and reduce overreliance on parent municipality. 

The 2018/2019 financial year has not been without challenges though and the following were 
faced by the Entity that are to be addressed in the new financial year and going forward: 
Packaging of projects for funding and raising finances for sustainability through project initiatives 

• Funding model for catalytic projects 

• Stakeholder Management 

• SMME Capacity Development 

• Brand positioning/ Management 

• Ownership and operations management of agricultural projects 

Local Economic Development 

One of the paramount initiatives that the Entity has focused on is to capacitate local farmers to 
be academically inclined in farming and increase the percentage of procuring vegetables for 
the National Schools Nutrition programme (NSNP) from local farmers. The Entity further continues 
to extend technical and financial support to the farmers that are in the open fields project and 
any other farmers within the district that need technical expertise and training. 

There are however a number of challenges that are faced by the farmers on the ground which 
hinders their growth. The following are the typical challenges facing all farmers in the District: 

• Limited budget 

• Lack of infrastructural development 

• Lack of substitute products 

• Lack of service providers who supply fertilizers and chemicals in iLembe 


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2018/2019 AR - Final Draft Jan 2020 


In recognition of youth development and in unison to invest on potential leaders of tomorrow, 
the Entity and the Department of Labour successfully launched the Unemployment Insurance 
Fund (UIFJ learnership programme in the fourth quarter. 

Furthermore, the Entity pursued and unlocked economic opportunities with the Department of 
Cooperative Governance and Traditional Affairs on the Biomass Project. This project will convert 
and add value to any biomass and turn it into useful products such as charcoal, oil and gas. The 
implementation of the project will assist in reducing unemployment levels within the district and 
create opportunities for entrepreneurs to grow their business. 

The Agency hosted its first Black Industrialist with the objective to initiate a measurable and 
targeted entrepreneurship development programme and to open a structured dialogue 
between targeted entrepreneurs and industries. It was a platform where local industries shared 
information on the opportunities available for black industrialists. 

Enterprise iLembe continues to assist co-operatives and SMME's to acquire Business 
Management Skills through training sessions, learnerships and also secure funding from various 
private and government institutions. The Social Facilitation unit has registered a total of thirty- 
two [32] Co-operatives in the 2018/19 financial year and ensuring that there's reputable working 
relationships and vast knowledge and understanding of business operations through training 
sessions offered. 

The Entity is a playing vital role in mentoring, supporting and nurturing entrepreneurs through 
SMME workshops and via the business incubator ensuring long term sustainability of small 
businesses. The iLembe Business Incubator is situated in KwaDukuza and supports more than fifty- 
eight entrepreneurs in various sectors from all four local municipalities. 

Tourism, Investment & Stakeholder Management 

Tourism continues to be a major contributor to the GDP of the region contributing just over R3.4 
billion to the economy and creating/sustaining over 11 000 jobs. Enterprise iLembe participates 
at relevant national and international trade and consumer shows such as WTM London, ITB 
Berlin, Africa Travel Indaba and the Gauteng Getaway Show. The Entity produces marketing 
material and supports events that have the potential to attract more tourists to the destination. 

The Entity continues to maintain key strategic partnerships with stakeholders such as Tourism KZN 
and Durban Tourism in order to partner, align and leverage of tourism programmes and projects, 
the hosting of the KZN Travel Academy and SMME workshops are some of the partnership 
initiatives. Enterprise iLembe also forms part of the Route Development Committee; Durban 
Direct which is responsible for the attraction of new airlines into King Shaka International Airport. 


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Enterprise iLembe in partnership with KwaDukuza Municipality commissioned the Nokukhanya 
Luthuli Street Feasibility Study. The Tourism Strategy identified KwaShushu Hotsprings / Ntunjambili 
as a catalytic project for Maphumulo and the district, budget will be set aside for the feasibility 
study of this project in the 2019/2020 financial year. 

There is an ongoing partnership with Trade and Investment KZN to market and promote iLembe 
district as an investment destination of choice. In order to deliver on this mandate, it is imperative 
that Enterprise iLembe firstly creates awareness of the Entity and its mandate as well as promote 
the region on both a national and international level to various stakeholders which include both 
trade and investors. The Entity has embarked on trade missions in addition to direct 
engagements with investors which has yielded positive results with new investments coming into 
the district. 

The Entity acknowledges that the results of marketing is usually long term. Building such trade 
relationships is a cycle that takes 3-5 years, and is not necessarily obvious and immediate. It is 
thus critically important to both create and maintain these relationships with key stakeholders 
and potential investors. Personal contact is vital in a person-centred industry such as tourism 
and investment. 

On the aspect of formalizing cooperation and support to the economic well-being of iLembe 
District, Enterprise iLembe entered into a Memorandum of Understanding with the iLembe 
Chamber of Commerce, Industry and Tourism. This was formalised at a joint media briefing which 
was held on the last quarter of 20J8/2019. 

The Entity has developed a magazine titled iThemba that is published to communicate the 
programmes and projects that Enterprise iLembe, the district and the local municipalities are 
involved in. In addition, the Entity ensures communication through social media, print and radio 
stakeholder engagements. 

Conclusion 

We appreciate the support and guidance from our shareholder; iLembe District Municipality, 
the family of local municipalities as well as from our stakeholders and partners. 

The Board of Directors have continued to provide strategic direction and leadership and we are 
grateful for their commitment towards the Entity achieving its mandate. The management and 
staff continue to work hard at supporting the vision of the Entity and we are thankful for their 
dedication and tireless efforts. 


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Nathi Nkomzwayo 
Chief Executive Officer 


1.4 Executive Summary 

The key economic drivers in the district are still consistent in the sectors of agriculture, tourism, 
manufacturing and services and as a district we strive to continuously bridge the huge divide 
between the first and second economies through the identification, facilitation and 
implementation of key projects. 

Enterprise iLembe has progressed well in building capacity appropriate for a well-resourced 
Entity to carry out the mandate, but we still remain under pressure to do more. 

The 2018/19 f nancial year has not been without challenges and the following were faced by 
the Entity that are to be addressed in the new financial year and going forward: 

> Packaging of projects for funding and raising finances for sustainability through project 
initiatives 

a Funding model for catalytic projects 

> Stakeholder Management 

> SMME Capacity Development 

> Brand positioning/ Management 

> Ownership and operations management of agricultural projects 

1.5 Strategic Objectives & Functions 

1.5.1 Agency Mandate 

0 Develop, review and strengthen the local economic development strategy on behalf of 
the district and family of municpalities; 

0 Champion a wide range of activities which emerge as important from the family of IDPs 
and LED Strategies; 

0 Co-ordinate LED activities to ensure alignment and integration; 

0 District marketing and promotion of tourism and investment promotion; 


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0 Facilitate the identification, packaging and implementation of catalytic projects in the 
four key sectors and new sectors; 

0 Provide professional and multi-skilled support and networking services to major investors 
who wish to invest in the region; 

0 Work with local government to facilitate a business enabling environment; 

0 Implement business, retention and expansion (BR&E) programmes in partnership with 
local business; 

0 Build twinning relationships with developed regions nationally and internationally; 

0 Social Risk Management. 


1.5.2 Key Strategic Goals & Objectives 



Facilitate the packaging & implementation of projects in 
existing & new sectors 


Market & Promote the iLembe District as an Investment 
Tourism & Business Destination 





Research other potential growth sectors in addition to the 
current four sectors of main focus 


. ' Identify, build and co-ordinate partnerships among socio 

t'flC v' economic stakeholders 

A" 


Facilitate research that assists with Policy Development and 



& 

j influence pokey and She regulatory environment for socio |j 
v • economic development an invest men i 


STRATEGIC GOAL 1; 

Facilitate the packaging & implementation of projects in existing and new sectors 
Objectives 

• Implement and ensure sustainability of existing projects 

• Identify and package new projects in existing sectors 

• Tap into available programs to create more black industrialists 


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STRATEGIC GOAL 2: 

Market and Promote the iLembe District as an Investment. Tourism & Business Destination 
Objectives: 

• To attract interest for new investment to iLembe District 

• To increase visitor numbers to iLembe District 

• To support new tourism product development and the geographical spread of tourism 

STRATEGIC GOAL 3: 

Research other potential growth sectors in addition to the current four sectors of main focus 
Objectives- 

• To identify and package projects in new sectors 

• Tap into available programs to create more black industrialists 

STRATEGIC GOAL 4: 

Identify, build and co-ordinate partnerships among socio economic stakeholders 
Objectives- 

• Facilitate Business Retention and Expansion 

• Support Entrepreneurship Development 

STRATEGIC GOAL 5: 

Facilitate research that assists with Policy Development and formulation that impacts the 
mandate of the Agency 
Objectives- 

• Identify policies and Acts that effect the Agency 

• Research Team 

• Research that will influence the decision making process 

STRATEGIC GOAL 6: 

Influence policy and the regulatory environment for socio economic development an 
investment 
Objectives: 

• Identify existing structures and leverage of those 

• If none, create structures 

• Use structures to engage government 

• Include issues of infrastructure and spatial planning 

• Influence infrastructural and spatial planning 


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1.5.3 Roles & Responsibilities 



It is the role of Enterprise iLembe to facilitate and promote socio economic development in 
the region. The role of Enterprise iLembe can be further defined as follows; 

• Nurture new ideas which have commercial potential AND have high impact potential in 
regards to poverty alleviation, jobs and empowerment. 

• Build partnerships between public sector, support institutions, private sector and the 
community. 

• Build partnerships within each locality and support one another in service delivery. 

• Collectively bridge the gap between Ui & 2nd economies through catalytic & high- 
impact projects. 

1.6 Audit Committee Report 

1. Objective 

The purpose of this report is to present the Audit Committee's progress in carrying out its oversight 
responsibilities, including oversight for the statutory audit process for the financial year ended 30 
June 2019. 

2. Terms of reference 

The mandate of the Audit Committee is legislated in terms of section 164 of the Municipal 
Finance Management Act, 2003 (MFMA) which requires the Audit Committee to advise the 


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Accounting Officer and Council on matters relating to: Internal financial control and internal 
audits; risk management; adequacy, reliability and accuracy of financial reporting and 
information; accounting policies; performance management and evaluation; effective 
governance; Compliance with the MFMA and any other applicable legislation and / or policies 
and any other issues referred to it by the Entity. 

The Audit Committee is also required to fulfill the functions of a Performance Management 
Committee constituted in terms of Regulation 14(2) of the Local Government: Municipal 
Plannng and Performance Management Regulations, 2001. 

The MFMA also requires the Audit Committee to review the annual financial statements, respond 
to Board on matters raised by the Auditor General and carry out investigations into the financial 
affairs of the Entity. 

3. Audit Committee composition and attendance 

The Audit Committee comprises four independent members. The members have diverse skills 
and experience. The term for audit committee members commenced in May 2018. 

An independent member chairs the Committee. Both the Internal and External Auditors have 
unrestricted access to the Audit Committee. 


The table below sets forth the membership and attendance at meetings of the committee for 
the period ended 30 June 2019: 


Names 

Role 

Meetings 

Attended 

26 Sept 

2QJB 

.L2.Na* 

2Q1B 

75 Feb 

2019 

3. May 

7019 

16. Aug 

70i 9 

Mr S L Ndlovu 

Member 

5 

V 

✓ 

✓ 


✓ 

Ms C Gertze 

Member 

5 

✓ 

✓ 

✓ 

✓ 

✓ 

Ms B Zulu 

Mem be’ 1 

3 

<s> 



* 


Mr S Hlophe 

Cha rperson 

5 

✓ 


✓ 

V* 

✓ 


The following are standing invitees to the Audit Committee Meetings: 
Representative from Auditor-General (AG) 

Representatives from Provincial Treasury and COGTA 
Internal Audit 

The Chief Executive Officer (CEO) 

The Chief Financial Officer (CFO) 

The Chief Operations Officer (COO) 

The Risk Management Committee Chairperson 


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4. Audit Committee’s Responsibility 

The Audi Committee operates under written terms of reference, the audit committee charter 
which is approved by the Board annually. These terms of reference are in line with the 
requirements of section 166 of the MFMA and Treasury Regulation 27.1. 

in this report, under relevant headings, wo have summarized the activities and progress we have 
undertaken in executing of our mandate: 

4.1 Internal Audit and internal Control 

In line with the requirements of the MFMA the Internal Audi provides the Audit Committee and 
Management with assurance as to whether the internal controls are appropriate and effective. 
This is achieved by means of the risk based internal audit plan which is approved by the Audit 
Committee annually. 

The internal audit function of the Entity is currently outsourced to Nexia SAB&T. 

The Audit Committee had approved the Internal Audi Plan for 2018/19 financial year, which 
had to be revised and adopted by the current internal auditors as it was previously prepared by 
the previous internal audit. Internal Audit reports were presented to the Audit Committee during 
this period. 

4.2 Risk Management 

The Audit Committee is responsible for oversight of the internal and external auditors as well as 
financial reporting. Because the assessment of internal controls over financial reporting is risk- 
based, the Audit Committee is responsible for overseeing management’s risk policies and 
discussing the key risk exposures with management. 

The Entity conducted a risk assessment workshop during the start of the financial year and the 
top key risks were identified, measured and prioritised and the updated risk register was adopted 
on 1 July 2018. The implementation of MSCOA is still taken as a priority and high risk as there are 
constant upgrades through the financial system which the Entity must continually implement 
and comply with, as per the new reporting standards introduced by Treasury, which was 
implemented by the entity on 1 July 2017 as legislated. 

Risk Management Reports are presented to the Audit Committee during its meetings. Based on 
our review and observations we are comfortable that the Enterprise adequately manages all 
critical risks faced by the organization. 



2018/2019 AR - Final Draft Jan 2020 


4.3 ICT Governance and ICT Operations 

ICT is the integral part of the organization. There have been improvements within the ICT function 
with the Entity resolving to have this function in-house and the appointment of an ICT Officer 
who is currently assessing the infrastructure and other ICT related resources that the Entity will 
need going forward. Audit Committee resolved that the issues of ICT Governance be a standing 
item in the Agenda. 

4.4 Evaluation of Financial Reports and Annual Financial Statements 

For the reporting period under review, the Audit Committee was able to evaluate the following: 

Annual Performance Report and Annual Financial Statements were presented to the Audit 
Committee on the meeting held on the 16th August 2019. The Audit Committee reviewed the 
AFS through scrutiny and engagement with management as the AFS were yet to be reviewed 
by Internal Audit. The Audit Committee requested that internal audit circulate the audited AFS 
to the committee on 21 August 2019 so that the committee may satisfy themselves that the AFS 
presented are credible and present the true reflection of the financial affairs of the enterprise 
and provide further input if any. With regards to APR this was reviewed through scrutiny and 
engagement with management. We are satisfied of the progress made at an organizational 
level, with management notifying the committee that some of the evidence will be submitted 
before final submission, which will decrease the number of targets not met, currently sitting at 
81% of targets met. 

With regards to AG Action Plan, the management confirmed that the issues raised by AG are 
being attended to, with the percentage of progress sitting at 92%. We evaluated this through 
an Action Plan progress report submitted to Audit Committee. We are satisfied that these 
matters are addressed adequately. The two outstanding issues are currently beyond 
management control, one being the response from SARS on the reversal of interest and 
penalties and the receipt of the permission to occupy (PTO) certificate from the tribal council in 
Maphumulo for the use of the vineyards site. 

We are comfortable that MSCOA compliance has progressed adequately and through 
engagement with the District Municipality we are satisfied with the support provided to the 
Enterprise. During the review of AFS we noted that the AFS were in accordance with MSCOA 
and that the Enterprise is able to transact and process entries using the MSCOA system. The 
Entity currently has a signed agreement (SLA) with Munsoft - the financial system service 
provider which is assisting in queries being promptly attended to. 

4.5 Performance information 


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The Audit Committee also serves as the Performance Audit Committee for the Enterprise. The 
legal responsibilities of the Audit Committee in this regard are set out in terms of the Local 
Government: Municipal Planning and Performance Managemenf Regulations 2001. 

As indicated above the Audit Committee reviewed the Annual Performance Report for the year 
ended 30 June 2019. The Entity is currently setting at 81 % of targets met in its performance target 
measured at an organizational level. The Audit Committee recommends a review of 
performance targets so to be realistic and in line with smart principles. 

5. Recommendations 

The Board and management at all levels should continue with commitment to optimally use 
scarce resources, cash-flow and sustainability plans and regular monitoring and evaluation to 
ensure that the Enterprise iLembe continues as a going concern. 

The Board and management need to continuously monitor and review internal controls. The 
Chief Executive Officer must ensure that there are consequences for non-adherence with 
internal controls. 

The Chief Executive Officer and management should ensure that credible, reliable and 
accurate financial and performance information is submitted quarterly for review by the Board 
and the Audit Committee. 

The Chief Executive Officer should ensure that recommendations of internal and external audits 
are implemented as per the action plans and report progress on a quarterly basis. This should 
assist to prevent irregular, fruitless and wasteful expenditure as well as non-compliance with laws 
and regulations. 

The Chief Executive Officer and the Board should explore possible alternative funding for Local 
Economic Development projects. The committee also commended the various initiatives that 
the CEO and management undertook in the 2018/2019 financial and the funding raised for 
different projects. 

6 . Conclusion 

The implementation and maintenance of proper systems of internal controls, risk management, 
the prevention of fraud and errors, safeguarding of the assets of the enterprise and compliance 
with relevant laws and regulations, are the responsibility of the Board. The role of the audit 
committee is to monitor the efficiency of the procedures and mechanism which the Board has 
put in place in order to ensure that its policies and procedures are adhered to. 

The Audit Committee remains committed in assisting and supporting the Board in the execution 
of its mandate and towards managing the financial affairs in accordance with the law. 


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On behalf of the Audit Committee 



Silas Hlophe 

Chairperson of the Audit Committee 


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CHAPTER 2 - SERVICE DELIVERY & 
PERFORMANCE HIGHLIGHTS 

2.1 Key Successes & Challenges 

• The entity ended the 2018/2019 financial year at a revenue of c : rca 49% more than the 
original budget. This is as a result of a concerted effort by the entity to grow its revenue 
base 

• The Entity has continued to forge new and strengthen existing partnerships with various 
stakeholders 

2.2 Projects Undertaken 
2.2.1 Multi-Year Funded Projects 


PROJECT NAME 

PROJECT DESCRIPTION & STATUS QUO 

iLembe Vineyards and Winery Project 

Project Budget 18/19: R 1 063 036.00 

The iLembe vineyards and winery project is a two-phased project which involves 

the establishment of a pr mary Villard Blanc crop for further processing in a winery 

established as a first of its kind in the D strict a total of 12 hectares of vines have 

been planted across Mandeni, Maphumulo and Ndwedwe The w.nery s located 

al the Collisheen Estate in the Sugar Rush park which is be ng developed into a 

tourism precinct. The Winery currently processes and bottles a wh'te cult var wine 

from grapes grown by the communities within iLembe District. 

1787 wine has been expanded by sourcing different cultivars from Kloof Wine 

Estates in Cape Town, which consists of 1000 bottles of w'ne for each of these 

cultivars which are Sauvignon Blanc, Chenin Blanc Rose. Merlot, Cabernet 

Sauvignon. Harvesting and bottling of wine happens on an annjal basis during 
the month of February followed by processing and then bottling at the winery 

[Compensation). The iLembe winery license renewal has been submitted and is 

now awaiting a response from KZN Liquor Authority 

Pre-prunrig has commenced in the Mandeni and Maphumulo s te; \dwedwe was 

re-planted in November 2016 with a red wine cultivar, wh'ch should be ready for 

harvesting in February 2020. The wine is marketed and sold at various events and 

activations 

[Lembe Open Farms 

Project Budget 18/19: R 1 200 000 

SASA Funding 18/19: R 220 000 

The project entails establishing and supporting com munity-based co-opera t ves to 

operationalize sustainable agr cultural farms to produce cash crops for both the 

community's needs and for sale to the Department of Education's National 

School's Nutrition Programme. This programme has opened up sustainable and 

reliable markets for the local small-scale farmers. The Department is rn need of 64 


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Ions of vegetables such as cabbages; butternut; carrot, onions, tomatoes and 

green beans weekly for supply to the National Schools Nutrition programme* 

Enterprise iLembe supported a total of 20 farms* This supports entails the provision 

of mechanization, supply of chemicals, fertilizers, seeds, seedlings, technical 

advice and mentorship to the farmers in the four local municipalities. Though 

Enterprise iLembe endeavors to establish projects that are not only sustainable but 

also ensures that there is sufficient skill transfer to enable the farmers to become 

self-sufficient entrepreneurs* Climatic challenges and financial resources is forcing 

the Entity to review this programme and find a much sustainable and practical 

approach of supporting farmers without creating financial dependency and 

burden on the organization. The planting plan is one such tool that will ensure that 

the project is self-sufficient. 

Through LDS Charities there are three (3) new projects that have bee'’ identified 

that will be assisted with infrastructure development in the new f'nancial year 

2019/20; this will include fencing, borehole drilling, insulated storage contaners 

and irrigation. 

South African Sugar Association [SASA] has provided finding to assist four (4) 

projects with irrigation and fencing; and the appointed service providers has 

completed the installation of the fencing and irrigation for all four (41 projects. 

Through the Agri-Parks Programme which is funded by Department of Rural 

Development and Lond Reform (DRDLRj; four [4] projects were assisted with the 

provision of 170 000 seedlings [tomatoes, cabbages & onions) which were 

: procured and deivered by DRDLR. 

Agricultural Hydroponic Tunnels 

Project Budge! 18/19; R1400 000 

The agricultural hydroponic tunnels project became a stimulus for agro processing 

within the District. With the collective establishment of 8 hydroponic tunnes within 

all four local municipalities (four s-tes^ the tunnels tapped intc a niche market by 

growing high value crops for sale in retail stores 

Mandeni tunnels are under production and the current service provider Farley 

Farms is producing cucumbers with a specific market of Checkers and RSA agent 

based in the Durban Fresh Produce Market in Clairwood. 

Maphumulo Tunnels have both been repaired, tested and handed over. The site 

currently does not have a water source for irrigation and fertigation, hence water 

tankers from IDM were requested for irrigation testing. EMwer Tunnels have been 

repaired and are now fully functional; and the tunnel is under production as it has 

been planted with tomatoes which are fruiting; Enterprise iLembe is in the process 

of finalizing an agreement with a potential technical partner. Ndwedwe Tunnel 

has been repaired and engagements with the potential partners has 

commenced. The agency received a resolution from Maphumulo LM Council to 

project manage Emambedweni Tunnels; os a result, Crocetta has been appointed 

to repair Emambedwini tunnels and will commence work in the new financial year 

2019/20. 


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National Schools Nutrition Project Budget 18/19: R 11 831 102 

Programme Processing Facilities In the past three (3) years, the processing facilities have offered a logistical solution 

to the National School’s Nutrition Programme [NSNP], by providing a facility where 
vegetables sourced from the local farms can be cleaned, packaged, stored and 
dispatched to the 409 schools within the District. 


Four (4| Hubs are now fully functional which are Mandeni and Maphumulo, A new 
panel of fifty-seven [57J local transporters have been appointed through SCM 
processes which are utilized to transport vegetables to schools as part of the NSNP. 
Enterprise iLembe has further appointed a service provider to build two cold 
storages in Maphumulo and Mandeni. 

Enterprise iLembe had engagements with the Acting Director-Department of 
Education (DoEJ to site challenges experienced in the implementation of this 
programme which included the possibilities of changing the menu, re-calculation 
of tonnages, substitution of commodities which are out of season, revised calendar 
to be in-line with kilometres; and the increased in the costs of running the 
programme resulting in the need to review the rate/fee at which the programme 
is being operated. 

There is not enough produce from local farms to feed into the NSNP as we are stiP 
sitting on an annual average of 70% of local procurement, as farmers are 
apprehensive to plant for the National School’s Nutrition Programme; and farmers 
require technical and financial assistance to produce quality vegetables. 


District Wide Business Incubator 


Project Budget 18/19: R 3 980 000 

Through the completion of the business incubator feasibility study in October 2018. 
Goshen Entrepreneurship Hub was the appointed as an implementing agent to 
roll-out the Business incubator Programme for a period of three [3] to assist 40 sub¬ 
contracted SMMEs through the provision of a structured and subsidized 
programme to ensure that SMME's within the iLembe district are sustainable 
through the support of the incubation programme which is managed by Enterprise 
iLembe. 


As a result, the b : -i#v; incubator office has been set up in KwaDukuza area to 
open the programme up to include other SMMEs in other sectors from ail local 
municipal areas. Enterprise iLembe Community Development Services have been 
extended to the Business incubator Office where the Community Development 
Officers are visiting the office every Wednesday once a week to provide business 
support to SMMEs and Co-ops, as a result a total of thirty [32| Co-operatives have 
been registered in the 2018/19 FY and are now in the processes of being assisted 
with business compliance, training and funding opportunities. 


The implementing agent submits monthly progress reports showing the business 
support and assistance that have been provided to the Incubatees as well as 
challenges faced by SMMEs and Co-ops and interventions that have been devised 
to improve their businesses. The Enterprise Development Manager has been 
appointed to manage the running of the business incubator office and to provide 
direction to the implementing agent on the Enterprise iLembe s vision for the 
incubation programme and the expected outcomes. 


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Maphumulo Integrated Energy 

Centre [IEC] 

Project Budget 18/19: R 750 000 

Engen is proposing to construct an Integrated Energy Centre (IEC| in Glendale, 
KwaMaphumub. The site is approximately 0.63ha in extent. The development will 

entail shops, new canopy, internet cafe/computer room, library, boardroom & 
toilets, distribution centre, Underground storage tanks, 43 parking bays, Septic tank 
and sookaway. Unga Trading 7 has been appointed to conduct professional 
services for Geohydrological Investigations, Designs and Drawings, Land Surveying, 
SPLUMA Application, Traffic Engineering and Project Management in preparation 

for the construction of the Maphumulo IEC Project. 

Mandeni Youth Enterprise Park 

CoGTA Grant Funded Project Budget IB/19: R 1 000 000 

The project entails the construction of a park that will accommodate Youth 

Enterprises in a structured marketplace, with an objective to stimulate 
entrepreneurship opportunities for Youth within Mandeni Local Municipality. The 
Project Management Team and Project Steering Committee structures are in 
place and they play a technical and an oversight role in the implementation of 
the project, Delca systems has been appointed as project consultants to design 
the layout and operational plan for the Youth Enterprise Park and are reporting to 
both the PMT and PSC. Project inception report and informants/status quo report 
has been completed and approved: the project is currently sitting at the concept 
design and viability phase. Land in the Thokoza road area (Ward 7) has been 
secured by the Mandeni Municipality through receiving approval from Mathonsi 

Traditional Council. 

Delca systems is currently engaging with a number of freight com pan es to assist 

with the sourcing of containers, and this process is ongoing 

Biomass 

CoGTA Grant Funded Project Budget 16/19: R 5 000 000 

The primary objective of the project is to estab*$h a biomass processing plant, to 
process biomass and bio waste into various renewable energy products (charcoal, 
oil & gasj. It creates a mechanism for sustainable economic development and 
wealth generation for r^ra' communities as well as integration of small scale 
producers into the existing petrochemical, agriculture and transportation industries 

The project also encourages real broad based black economic participat on in 
both the emerging biofuels industry as weif as in the estabished petrochemicals 
industry: and serve as the stimulus to the development of secondary industries e.g. 
glycerine production, charcoal and activated carbon production. It also provides 
a mechansm to prove the viability of med um scale community based Biomass 
processing projects so as to facilitate more private sector investments in future 
green energy projects. 

Enterprise iLembe entered into a partnership agreement with Phambili Energy in 
Dec 2018 for the implementation of the Biomass Conversion Combination Plan 
Project which will be located in Ward 3. KwaDukuza Area: and the partnership 
agreement will be for a period of five (5) years until the project is handed over to 
the Local Community as per the KZN CoGTA identified ownership model. The 
project inception has been completed: and the project is sitting in the 
implementation where the machinery in the plant has been refurbished and will 

be undergoing testing. 

Public wi-n 

CoGTA Grant Funded Project Budget 18/19: R 2 500 000 


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Enterprise iLembe s leading the implementation of iLembe Broadband Project, 

wh'ch a"ms to ensure that there is equitable and affordable access to internet 

connectivity across all local municipalities within iLembe Distr'ct. iLembe 
Broadband Project Masterplan identifies public Wi-Fi as one on key local economic 
impact opportunities that could be enabled by broadband infrastructure. 

Enterprise iLembe has appo'nted Inkanyezi Renaissance Group |IRG] wh'ch is an 

ICASA licensed telecommun cat'ons service provider to establish and manage Wi¬ 
Fi Zones at Ndwedwe Local Municipal Offices & Johnny Makhathin Civic Centre; 

and also Maphumulo Local Municipal Offices and Thusong Centers. Maphumulo 

and Ndwedwe Municipality has endorsed the implementation of the project; and 

the project is at the inception phase. 

District RASET 

Project Budget 18/19: R 5 000 000 

RASET has embarked on a Programme to Radically Transform the Agricultural 
Sector by opening up the government market and align support to emerging 

farmers. Enterprse iLembe has been nomnated as an implementing agent for the 

RASET Programme on behalf of the iLembe District Municipality, 

The Project Steering Committee [PSCJ has been formalized and sih monthly; and 
EDTEA RASET Programme Champions have been identified to assist the PSC in the 
implementation of the programme. 3 x Isvzu Trucks have been procured by EDTEA 

and has been delivered to £i Offices and will be used for delivering produce to 

schools. A vanefv J service providers have been appointed and allocated per 

cluster to supply, deliver and install fencing and irrigation sprinkler system for 
identified projects within the District to receive infrastructural support as part of the 
RASET Programme. The RASET Funding has also been allocated for the repa'rs of 

Emambedweni Tunnel; and the service provider has been appointed. The 

installation of fencing, irrigation and tunnel repairs will commence in the new 

financial year for 2019/20. 

Ndwedwe Mini-Factories 

Project Budget 18/19: R 2 500 000 

T*-:e objectves of the project also aims to enable the development of the Mini- 
factories which will assist in creating opportunities for youth, wome^. and the 
community at large to take advantage of the fast growing formal and informal 

economy in Ndwedwe area. 

This project is a med at developing area based cluster business enterprises model 
in Ward 6 Ndwedwe. These enterprises are to be operated by local entrepreneurs 

to meet primarily the needs within and beyond the local municipality and 
therefore can be understood a ‘township or rural enterprises’ as distinguished from 
those operated by entrepreneurs outside the area. Cogta has approved funding 
for the project and Enterprise iLembe is having continuous engagements to 
acquire land from the Ndwedwe Municipality in order to implement the project 


2.3 Capital Used 
REVENUE 


Actual I Budget | Variance 


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2018/2019 AR - Final Draft Jan 2020 



2019 

2019 

2019 


R 

R 

% 

Opening accumulated surplus 

31 363 456 

21 278 015 

47% 

Operating income for the year 

72 120 436 

81 982 182 

-12% 

Total 

103 483 892 

103 260 197 


EXPENDITURE 




Operating expenditure for the year 

70 248 833 

78 824 178 

-11% 

Closing accumulated surplus 

33 357 687 

33 106 250 

.8% 

Total 

103 606 520 

111 930 428 



Project details set out below. 


Projects 

2018/19 

Budget 

Adjustment 

Budget 

Actual 

Expenditure 

Variance 

% 

Total 

Project 

Value 

UIF 

- 

13 626 793 

11 999 307 

-12% 


SASA 

- 

220 000 

186 335 

-15% 


COGTA RASET 

- 

4 347 826 

588 119 

-86% 


COGTA 

BIOMASS 

- 

4 347 826 

2 666 500 

-39% 


COGTA YEP 

- 

869 565 

125 531 

-86% 


Tourism Ex IDM 

1 950 000 

1 950 000 

1 950 000 

0% 


COGTA Public 

Wi Fi 


2 173913 

856 246 

-61% 


COGTA Mini 
Factories 

* 

2 173913 

- 

-100% 


LED IDM 

3 050 000 

3 050 000 

3 050 000 

0% 


Kwashushu 

Project 

- 

1 393 478 

21 667 932 

1455% 


Development of 
SMMEs 

3 980 000 

3 980 000 

3 980 000 

0% 


District Growth 
Summit 

* 

131 000 

- 

-100% 


Maphumulo IEC 
Project 

700 000 

700 000 

697 500 

0% 


NSNP Project 

14 993 102 

12 756 178 

14 573 235 




24 673 102 

51 720 492 

62 340 705 




2.4 Job Creation & Skills Development 

2.4.1 Unemployment Rate 

Despite its strategic location, iLembe faces numerous economic challenges such as the high 
levels of poverty in the rural inland areas, which contrasts with rapid development along its 


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2018/2019 AR - Final Draft Jan 2020 


coastal regions, The District has been proactive in developing broad based interventions to 
facilitate local economic development in response to its challenges of high rates of 
unemployment and correspondingly high levels of poverty. 

The district’s unemployment rate is 31% in general and 37% amongst the youth (15-35). While 
unemployment is above the national average, it is below average for KZN. Youth 
unemployment is substantially lower than both the national and KZN average (with the 
exception of Maphumulo and Ndwedwe). The majority of employment in iLembe is in the 
wholesale, retail and trade industry (21%), community services (17%) and manufacturing industry 
(17%). The majority of employment in Ndwedwe is in agriculture, the majority of employment in 
Mandeni is in manufacturing while employment in Maphumulo is being sustained by 
government employment, and employment in KwaDukuza is the most diversified across all 
sectors. 


> Demographics 



2011 

2016 

iLembe 

606808 

657612 

Maphumulo 

96724 

89969 

Man deni 

138078 

147808 

KwaDukuza 

231187 

276719 

Ndwedwe 

140820 

143117 


Source: Stats SA 


Population in iLembe District 


700000 

600000 

500000 

400000 

300000 

200000 

100000 

0 



ILembe Maphumulo Mandeni KwaDukuza Ndwedwe 


H2011 H2016 


> Unemployment Rate 


Unemployment Rate (%) 

Youth (15*34) Unemployment Rate (%) 


2001 

2011 

2001 

2011 

iLembe 

48.0 

30.6 

55.8 

37.2 

Maphumulo 

75.9 

49.0 

83.3 

58.4 


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2018/2019 AR - Final Draft Jan 2020 


Mandeni 

45.1 

28 6 

51.5 

34.6 

KwaDukuza 

34.3 

25.0 

42.6 

30.8 

Ndwedwe 

67.8 

487 

76.4 

58.3 

Key Indicator 

iLembe 

KwaZulu-Natal 

2011 

2011 

Unemploymeni 

Unemployment Rate 

30,60% 

33.00% 

Youth Unemployment Rate 

37.20% 

42.10% 

Type of Employment % 

Formal 

76.81% 

76.98% 

Informal 

23.19% 

23.02% 


Source: Stats SA 


> Employment by Type and Skills Level 

Below is a figure indicating the breakdown of formal employment into the three skills categories. 
Between 10% and 13% of the formally employed in all municipalities are highly skilled, with 13% 
of those formally employed in Mandeni being highly-skilled. This is mainly attributed to the 
industrial development within the Isithebe Industrial Estate which attracts a greater number of 
highly-skilled workers to the area. 



Source: KZN Treasury 


2.4.2 Enterprise ILembe Projects: Direct Jobs Created/Retained 


PROJECT NAME 

2017/2018 

2018/2019 

iLembe Agri-Hubs/ Processing Facility 

15 [including 3 market loaders] 

15 [including 3 market loaders] 

Tunnels 

37 

33 

iLembe Vineyards 

47 

48 

iLembe Open Fields 

820 

910 

TOTAL 

919 

1006 


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2018/2019 AR - Final Draft Jan 2020 


2.4.3 Number of new co-operatives registered by Enterprise iLembe 


No 

Name of Cooperative 

Registration 

Date 

AN!® 

Total No. 
Members 

No. 

Females 

No. Males 

No. Youth 
>35 yrs 

l 

Sqalokwethu 

13/07/2018 

KwaDukuza 

12 

*0 

2 

7 

2 

Nondr 

04/09/2018 

KwaDukuz a 

5 

4 

1 

1 

3 

Izimpande 

14/ 09/2018 

KwaDukuza 

5 

5 

0 

3 

4 

Siphiwinhlanhla 

30/10/2018 

KwaDukuza 

5 

4 

1 

3 

5 

Imbewu 

22/01/2019 

KwaDukuza 

5 

1 

4 

1 

6 

Benzeleni 

05/03/2019 

KwaDukuza 

5 

0 

5 

0 

7 

Ocean View 

29/03/2019 

KwaDukuza 

5 

3 

4 

5 

8 

PMP 

06/05/2019 

KwaDukuza 

5 

2 

3 

0 

9 

Imvelap^i 

03/07/2019 

KwaDukuza 

8 

4 

4 

3 

10 

S'ngangslwazi 

26/06/2019 

KwaDukuza 

6 

3 

3 

4 

11 

Mdubuzo 

10/06/2019 

KwaDukuza 


4 

3 

4 

12 

Asenze 

15/07/2018 

Ndwedwe 

6 

6 

0 

2 

13 

Izikhwepha Zeth u 

24/08/2018 

Ndwedwe 

5 

5 

0 

3 

14 

Sukumani Mavila 

14/10/2018 

Ndwedwe 

9 

9 

0 

t 

15 

Injula 

18/10/2018 

Ndwedwe 

5 

3 

2 

2 

16 

Idikwe 

13/09/2018 

Ndwedwe 

8 

7 

1 

2 

17 

Nqanawe 

14/09/2018 

' Ndwedwe 

6 

5 

1 

2 

13 

Marest 

26/09/2018 

; Ndwedwe 

13 

II 

2 

6 

19 

Mbothayi 

30/09/2018 

Ndwedwe 

6 

6 

0 

0 

20 

Bonisa 

15/10/2018 

Ndwedwe 

5 

5 

0 

5 

21 

Izinga Craft Design 

30/05/2018 

Ndwedwe 

5 

2 

3 

4 

22 

Ubuhle Bentsha 

28/04/2019 

Ndwedwe 

5 

4 

1 

5 

23 

Lupetro 

30/04/2019 

Ndwedwe 

5 

4 

1 

4 

24 

Bhekimpilo 

26/06/2019 

Ndwedwe 

7 

4 

3 

3 

25 

Umbonomuhle 

28/06/2019 

Ndwedwe 

18 

10 

8 

5 

26 

Otweni Youth and 

Community 

17/08/2018 

Maphumulo 

5 

4 

1 

1 

27 

Thafamasi Women s 

22/10/2018 

Maphumulo 

7 

7 

0 

3 

28 

Sizangesisu 

05/02/2019 

Maphumulo 

7 

5 

2 

1 

29 

Isilhelo Sethu 

16/05/2019 

Maphumulo 

7 

3 

4 

5 

30 

Mastsweni 

12/04/2018 

Mandeni 

5 

3 

2 

5 

31 

80 planting 

08/01/2019 

Mandeni 

5 

4 

1 

2 

32 

Dokodwen’ 

15/02/2019 

Mandeni 

7 

4 

3 

5 

33 

Mangethe Prideland 

19/03/2019 

Mandeni 

5 

2 

3 

5 

34 

Imbonqa Yesizwe 

29/03/2019 

Mandeni 

5 

2 

3 

2 


2.5 Performance Management 

The Entity utilises the Service Delivery Budget Implementation Plan (SDBIP) as a performance 
management tool for the Entity as an organisation. Reporting using this performance plan is 


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2018/2019 AR - Final Draft Jan 2020 


conducted on a monthly and quarterly basis to the shareholder; iLembe District Municipality 
and includes portfolio of evidence. The performance management unit of iLembe District 
Municipality and the internal auditors (appointed by Enterprise iLembe) conduct a review and 
audit of the reports; this is then followed with coaching sessions held with the Chief Executive 
Officer of the Entity and the Municipal Manager of the District. 

In respect of individual staff members, the Job Descriptions of employees have been reviewed 
to be in line with the actual tasks and duties being performed by each person. Review sessions 
are held with each staff member with the respective manager and CEO. Individual 
performance plans are aligned to the Entity’s SDBIP. 


2018/2019 Budget Performance 

Tie total annual budget for 2018/2019 financial year for Enterprise iLembe amounted to R81.9 
million of wh'ch R38.9 million was allocated for projects and R43 million was allocated for 
operational costs. The Entity relies on the district for funding as well as the payment from DOE for 
the supply of fresh produce to schools within the district, for the NSNP project. The department 
pays an average of 60 cents per child per day to run this project. 

The National Schools NutriFon Programme (NSNP) was allocated only RI2, 7 million for the 
current financial year by the Department of Education (DOE). The Entity used the entire amount 
allocated, but there was an amount of R 8,9 million owing by the department at the end of the 
financial year. 

The Entity spent their total allocation from the district. Overall, the performance of the Entity was 
satisfactory, as can also be ascertained by studying the annual performance report for the 
2018/2019 financial year. 


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2018/2019 AR - Final Draft Jan 2020 


CHAPTER 3 - HUMAN RESOURCES & 
ORGANISATIONAL MANAGEMENT 


3.1 Organisational Structure 2017/2018 



New appointments in the 2017/2018 financial year: 


NO 

SURNAME 

JOB DESIGNATION 

START DATE 

1 

Jeffrey Bahle Magwaza 

Enterprise Development Manager 

(Contract) 

02 July 2018 

2 

Kerry vd Linde 

Admin and HR Officer 

01 October 2018 

3 

Revelation Sithole 

Agricultural Officer 

01 October 2018 

4 

Sbongile Mzobe 

Office Caretaker/Cleaner 

01 October 2018 

5 

Nokuthula Ngcongo 

UIF Co-coordinator (contract) & 

Acting Risk Officer 

16 May 2019 


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2018/2019 AR - Final Draft Jan 2020 


Resignations/Contract end 2018/2019 financial year 

1. Pearl Mbambo (Executive PA) - 29 March 2019 

2. Nokuthula Ngcongo (Finance Clerk) - 15 May 2019 

3. Jeffrey Bahle Magwaza (EDM) - 30 June 2019 

3.2 Institutional Transformation & Employment Equity 

In compliance with the Employment Equity Act, 55/1998, the Enterprise iLembe’s Employment 
Equity Plan has been crafted with the aim to remedy any form of discrimination in the workplace 
by removing all barriers in the employment policies, practices. 

Affirmative Action has been defined as the tool to implement immediate positive remedial 
action. Programs and procedures to address both historic and existing inequalities and 
imbalances of the past are being implemented. 

The Entity acknowledges the value of retaining staff especially employees with scarce skills and 
those who possess experience that is required for the Entity to fulfill its objectives. The Entity 
recognises that in order for it to be able to retain staff, it is very important to create an 
environment that encourages staff not only to succeed in their jobs but also to grow and 
achieve their personal development goats and aspirations. 


DESIGNATION 

NUMBER 

MALE 

FEMALE 

BLACK 

WHITE 

INDIAN 

Board 

7 

4 

3 

6 

1 

- 

CEO 

1 

1 

- 

1 

- 

- 

CFO 

1 

- 

1 

1 

- 

- 

Managers 

3 

1 

2 

2 

- 

1 

Total Staff 

29 

10 

18 

24 

2 

2 


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2018/2019 AR-Final Draft Jan 2020 


CHAPTER 4 - AUDITED STATEMENTS & 
RELATED INFORMATION 

4.1 Financial Statements & Related Information 

Attached hereto as Annexure A 

4.2 Report of the Auditor General on the audit of the financial statements 

Opinion 

1. I have audited the financial statement of the ilembe management development enterprise 
(Pty) Ltd set out on pages 6 to 43 (of annexure Ajwhich comprise the statement of financial 
position as at 30 June 2019, the statement of financial performance, statement changes in net 
assets, statement of cash flows and the statement of comparison of the budget information with 
actual information for the year that ended, as well as notes to the financial statements, including 
a summary of significant accounting policies. 

2. In my opinion, the financial statements present fairly, in all material respects, the financial 
position of the iLembe management development enterprise (Pty) Ltd as at 30 June 2019, and 
its financial performance and cash flow for the year that ended in accordance with South 
African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP) and 
the requirements of the Municipal Finance Management Acl of South Africa ,2003 (Act No. 56 
of 2003) and the Companies Act of South Africa, 2008 (Act No.7l of 2008} (the Companies Act). 

Basis for the opinion 

3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). My 
responsibilities under those standards are further described in the auditor-general’s 
responsibilities for the audit of the financial statements section of this auditor’s report’. 

4. I am independent of the municipal entity in accordance with section 290 and 291 of the 
international Ethics Standards Board for Accountants Code of Ethics for Professional 
Accountants and, parts 1 and 3 of the International Ethics Standards Board for Accountants' 
International Code of Ethics for Professional accountants (including international Independence 
Standards) (IESBA codes) as well as the ethical requirements that are relevant to my audit in 
South Africa. I have fulfilled my other ethical responsibilities in accordance with these 
requirements and the IESBA codes. 


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2018/2019 AR - Final Draft Jan 2020 


5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis 
for my opinion. 

Other matter 

6. I draw attention to the matter below. 

Unaudited disclosure note 

7. In terms of section 125(2) (e) of the MFMA, the municipal entity is required to disclose particulars 
of non-compliance with the MFMA in the financial statements. This disclosure requirements did 
not form part of the audit of the financial statements and, accordingly, I don’t express an 
opinion on it. 

Responsibilities of the accounting authority for the financial statements 

8. The accounting authority is responsible for the preparation and fair presentation of the financial 
statement in accordance with the SA Standards of GRAP and the requirements of the MFMA 
and the Companies Act, and for such internal control as the accounting authority determines 
what is necessary to enable the preparation of financial statement that are free from material 
misstatement, whether due to fraud or error. 

9. In preparing the financial statements, the accounting authority is responsible for assessing the 
iLembe management development enterprise (Pty) Ltd’s ability to continue as a going concern, 
disclosing, as applicable, matters relating to going concern and using the going concern basis 
of accounting unless the appropriate governance structure either intends to liquidate the 
municipal entity or to cease operations, or has no realistic alternative but to do so. 

Auditor-general’s responsibilities for the audit of the financial statements 

10. My objectives are to obtain reasonable assurance about whether the financial statements as a 
whole are free from material misstatement, whether due to fraud or error and to issue an 
auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, 
but is not a guarantee that an audit conducted in accordance with the ISAs will always detect 
a material misstatement when it exists. Misstatements can arise from fraud or error and are 
considered material if, individually or in aggregate they could reasonably be expected to 
influence the economic decisions of users taken on the basis of these financial statements. 

11. A further description of my responsibilities for the audit of the financial statements included in 
the annexure to this auditor’s report. 


Report on the audit of the annual performance report 


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2018/2019 AR - Final Draft Jan 2020 


Introduction and scope 

12. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004}( PAA) and 
the general notice issued in terms thereof, I have a responsibility to report material findings on 
the reported performance information against predetermined objectives for selected 
development objectives presented in the annual performance report. I performed procedures 
to identify findings but not to gather evidence to express assurance. 

13. My procedure address the reported performance information, which must be based on the 
approved performance planning document of the entity. I have not evaluated the 
completeness and appropriateness of the performance indicators included in the planning 
documents. My procedures also did not extend to any disclosures or assertions relating to 
planned performance strategies and information in respect of future periods that may be 
included as part of the reported performance information. Accordingly, my findings do not 
extend to these matters. 

14. I evaluated the usefulness and reliability of the reported performance information in 
accordance with the criteria developed from the performance management and reporting 
framework, as defined in the general notice, for the Local economic development objective 
presented in the annual performance report on pages xx-xx for the year ended 30 June 2019. 

15.1 performed procedures to determine whether the reported performance information was 
properly presented and whether performance was consistent with the approved performance 
planning documents. I performed further procedures to determine whether the indicators and 
related targets were measurable and relevant, and assessed the reliability of the reported 
performance information to determine whether it was valid, accurate and complete. 

16.1 did not raise any material findings on the usefulness and reliability of the reported performance 
information for this development priority. 

Other matter 

17.1 draw attention to the matters below. 


Achievement of planned targets 

IS. The annual performance report on Annexure B for information on the achievement of planned 
targets for the year and explanations provided for the under and over achievement of a 
sign'ficant number of targets. 


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2018/2019 AR - Final Draft Jan 2020 


Adjustment of material misstatements 

19.1 identify material misstatements in the annual performance report submitted for auditing. These 
material misstatements were on the reported performance information of local economic 
development. As management subsequently corrected the misstatements, I did not raise any 
material findings on the usefulness and reliability of the reported performance information. 

Report on the audit of the compliance with legislation 

Introduction and scope 

20. In accordance with the PAA and the general notice issued in terms thereof, I have a 
responsibility to report material findings on the compliance of the municipal entity with specific 
matters in the key legislation. I performed procedures to identify findings but not gather 
evidence to express assurance. 

21. The material findings on compliance with specific matters in key legislations are as follows: 

Expenditure management 

22. Reasonable steps were not taken to prevent fruitless and wasteful expenditure amounting to 
R35 150, as disclosed in note 23 of the annual financial statements, as required by section 95(d) 
of the MFMA. The majority of the disclosed fruitless and wasteful expenditure was caused by the 
late payment to the South Africa Revenue Services (SARS) for payroll taxes. 

Other information 

23. The accounting authority is responsible for the other information. The other information 
comprises the information included in the annual report. The other information does not include 
the financial statements, the auditor’s report and those selected development objectives 
presented in the annual performance report that have been specifically reported in this 
auditor’s report. 

24. My opinion on the financial statements and findings on the reported performance information 
and compliance with legislation do not cover the other information and I do not express an 
audit opinion or any form of assurance conclusion thereon. 

25. In connection with my audit, my responsibility is to read the other information and, in doing so, 
consider whether the other information is materially inconsistent with the financial statements 
and the selected development objectives presented in the annual performance report, or my 
knowledge obtained in the audit, or otherwise appears to be materially misstated. 



2018/2019 AR - Final Draft Jan 2020 


26. When I do receive and read the other outstanding information, if I conclude that there is a 
material misstatement therein, I am required to communicate the matter to those charged with 
governance and request that the other information be corrected. If the other information is not 
corrected, I may have to retract this auditor's report and re-issue an amended report as 
appropriate. However, if it is corrected this will not be necessary. 

There are no matters to report in this regard. 

Internal control deficiencies 

27.1 considered internal control relevant to my audit of the financial statement, reported 
performance information and compliance with applicable legislation; however, my objective 
was not to express any form of assurance on it. The matters reported below are limited to the 
significant internal control deficiencies that resulted in the basis for opinion, and the findings on 
compliance with legislation included in the report. 

28. The significant deficiencies in internal control, are described below 

Financial and performance management 

Compliance monitoring 

29. The review and monitoring of compliance with the laws and regulations were not adequately 
implemented to prevent the material non-compliance the fruitless and wasteful expenditure 
relating to the SARS penalties and interest charged for late payments of excise duties and 
payroll taxes. 


Auditor General 

Pietermaritzburg 
30 November 2019 


Annexure-Auditor-general's responsibility for the audit 

1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain 
professional skepticism throughout my audit of the financial statements, and the procedures 
performed on reported performance information for selected development objectives and on 
the municipal entity's compliance with respect to the selected subject matter. 


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2018/2019 AR - Final Draft Jan 2020 


Financial statements 

2. In addition to my responsibility for the audit of the financial statements as described in this 
auditor’s report, I also: 

• Identify and assess the risks of material misstatement of the financial statement whether due to 
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit 
evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not 
detecting a material misstatement resulting from fraud is higher than for one resulting from error, 
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override 
of internal control 

• Obtain an understanding of internal control relevant to the audit in order to design audit 
procedures that are appropriate in circumstances, but not for the purpose of expressing an 
opinion on the effectiveness of the municipal entity's internal control 

• Conclude on the appropriateness of the accounting authority’s use of the going concern basis 
of accounting in the preparation of the financial statements. I also conclude, based on the 
audits evidence obtained, whether a material uncertainty exists related to events or conditions 
that may cast significant doubt on the iLembe management development enterprise (Pty) Ltd’s 
ability to continue as a going concern. If I conclude that a material uncertainly exists, I am 
required to draw attention in my auditor’s report to the related disclosures in the financial 
statements about the material uncertainty or, if such disclosures are inadequate, to modify the 
opinion on the financial sfafements. My conclusions are based on the information available to 
me at the date of this auditor’s report. However, future events or conditions may cause a 
municipal entity to cease continuing as going concern 

• Evaluate the overall presentation, structure and content of the financial sfafements, including 
the disclosures, and whether the financial statements represent the underlying transactions and 
events in a manner that achieves fair presentation 

Communication with those charged with governance 

3. I communicate with the accounting authority regarding, among other matters, the planned 
scope and timing of the audit and significant audit findings, including any significant 
deficiencies in internal control that I identify during my audit. 

4. I also confirm to the accounting authority that I have complied with relevant ethical 
requirements regarding independence, and communicate all relationships and other matters 
that may reasonably be thought to have a bearing on my independence and, where 
applicable, related safeguards. 



2018/2019 AR - Final Draft Jan 2020 


4.3 Chief Financial Officer's Report for the period 2018/2019 
1. Introduction 

iLembe Management Development Enterprise (Pty) Ltd, trading as Enterprise iLembe, as an 
Entity of iLembe District Municipality (IDM), relies heavily on the operational grant that it receives 
from the district in order run the daily operations. As such, it is notable that even with the limited 
resources the Entity has, the year ended 30 June 2019, has been a productive one, but of course 
not without challenges. The Entity has managed to fulfil its objective and mandate as given, 
which is the provision of the Local Economic Development within the iLembe District, which 
includes the promotion of tourism and investment, this through a number of sectors where 
impact has been made. The financial resources available have been stretched in a way that 
has allowed the Entity to function in a productive manner. 

The funding sources currently available for the Entity includes allocations from IDM, and 
allocation from the Department of Education (DOE) for the running of the National Schools 
Nutrition Programme (NSNP), government grants for various projects and interest earned from 
investments. 

During the 2018/19 financial year, the Entity repaired one Ndwedwe tunnel and will source a 
technical partner in order to operationalize the tunnel. The Bulwer tunnel is currently used by the 
Entity in the production of tomatoes for the NSNP project whilst the tunnel in Mathonsi - Mandeni 
is being leased to Farley Farm. 

The Entity has been working with MSCOA since its implementation in 2017. There are constant 
upgrades and workshops that keep the Entity abreast with all applicable changes. 

Below is the summary of the financial position and performance of the Entity. 


2. Operating results 

Details of the operating results are included in the annual financial sfatements. which are part 
of this Annual Report. A summary of the results is as follows 



Actual 

Budget 

Variance 

REVENUE 

2019 

2019 

2019 


R 

R 

% 

Opening accumulated surplus 

33 654 799 

21 278 015 

58% 

Operating income for the year 

71 287 175 

81 982 182 

-13% 


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2018/2019 AR - Final Draft Jan 2020 


Total 

104 941 974 

103 260 197 


EXPENDITURE 




Operating expenditure for the year 

71 104 693 

78 824 178 

-13% 

Closing accumulated surplus 

35 520 822 

33 106 250 

7% 

Total 

106 625 515 

111 930 428 



The variances for the 2018/2019 financial year are as a result of additional revenues in the form 
of grants that where made available to the entity. 


An amount of R 62 340 705 was spent on projects during the 2018/19 financial year as follows 


Projects 

2018/19 

R 

UIF 

11 999 307 

SASA 

186 335 

COGTA RASET 

588 119 

COGTA BIOMASS 

2 666 500 

COGTA YEP 

125 531 

Tourism Ex IDM 

1 950 000 

COGTA Public Wi Fi 

856 246 

COGTA Mini Factories 

- 

LED IDM 

3 050 000 

Kwashushu Project 

21 667 932 

Development of SMMEs 

3 980 000 

District Growth Summit 

- 

Maphumulo IEC Project 

697 500 

NSNP Project 

14 573 235 

TOTAL 

62 340 705 


One of the challenges that Enterprise ilembe faced during the 2018/2019 financial year was 
that the IDM allocation was cut by R3.8 million which meant that the Entity had to cut on some 
operational expenses. 

During the last financial year, 2017/2018, the Department of Education (DOE) owed the Entity 
R5, 2 million. During the current financial year, 2018/2019 DOE again owed the Entity an amount 
of R8.9 million. The increase in the outstanding amount was due to a request by DOE for the 
entity to supply Amasi during the last quarter of the financial year. 




2018/2019 AR - Final Draft Jan 2020 


The Entity has signed a three year SLA with DOE with effect from July 2017 to June 2020. 


3. Unspent conditional grants 

The following amounts with regards to conditional grants were unspent as at 30 June 2019: 


Project Name 

Unspent grants 30 June 2019 

UIF Grant 

3 671 505.92 

SASA Grant 

22 223.75 

COGTA RASET Grant 

4 323 662.92 

COGTA BIOMASS Grant 

1 933 525.00 

COGTA YEP Grant 

855 638.80 

Tourism Ex IDM 

- 

COGTA Public Wi Fi Grant 

1 515 316.86 

COGTA Mini Factories Grant 

2 500 000.00 

LED IDM Grant 

- 

Operating Grant IDM 

- 

Development of SMMEs 

- 

District Growth Summit 

131 369.00 

Maphumulo IEC Project 

- 

TOTAL 

14 953 242.25 


A request for the roll-over will be submitted as soon as unspent amounts are audited and 
confirmed by Auditor General. 

4. Accumulated surplus 

The accumulated surplus as at 30 June 20! 9 was R 33 357 687 . 


5. Cash and cash equivalents 

As at 30 June 2019 the cash and cash equivalents held by Enterprise iLembe were as follows: 


Details 

R 

Cash at bank 

8 824 427 

Current Investments 

11 404 696 

TOTAL 

20 229 123 


6. Expression of Appreciation 


328 





2018/2019 AR - Final Draft Jan 2020 


A successful year is never a one man's victory, but a collective effort from all other stakeholders 
involved in the running of the Entity. It is in this spirit that I would like to extend a heart-felt 
appreciation to the Chairman of the Board, the Board Members, the audit committee, the Chief 
Executive Officer, the Heads of Departments within the Entity, the finance staff and the rest of 
staff within the Entity for their support and assistance. Special appreciation is also given to the 
Office of the Auditor-General for their support and assistance in resolving issues that arise during 
our interactions. 

I would also I ke to extend my appreciation to our shareholder, iLembe District Municipality, for 
their continued support and working together with us to fulfil our mandate as Enterprise iLembe. 



S.N. MTHEMBU 
Chief Financial Officer 


329 



Audit Action Plan 


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2018/2019 AR - Final Draft Jan 2020 


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2.2 Fruitless and 30-Jun-19 Completed. All EMP 201 I 100% 

Wasteful returns submitted on time. 

Expenditure: 
















333 



CHAPTER 5 - FUNCTIONAL SERVICE 
DELIVERY & REPORTING 

5.1 Service Level Agreement 

Enterprise iLembe has a Service Level Agreement with iLembe District Municipality. The SLA 
guides the mandate of the Entity and sets out the function and services to be delivered as 
follows, 

1. Project Management Unit: Using the Project Management Unit for developing and 
implementing detailed service delivery plans within the framework of the municipality's 
IDP; 

2. Promotion of Social and Economic Development: To promote integrated and equitable 
social and economic development within the district as a whole by taking appropriate 
steps to enhance such development; 

3. Tourism: Promotion of local tourism for the area of the district municipality; 

4. Markets: The establishment, conduct and control of fresh produce markets serving the 
area of a major portion of the municipalities in the district; 

5. Abattoirs: The establishment, conduct and control of abattoirs serving the area of a 
major portion of the municipalities in the district; 

6. Airports: Municipal airports serving the area of the district municipality as a whole 

7. Incidental Powers: The right to exercise any power concerning a matter reasonably 
necessary or incidental to the effective performance of the functions, the exercise of the 
power and the provision of the services in the paragraph 1 to 7 above. 

The following items are not the core function of the Agency: 

• Project Management Unit 

• Social development 

• Markets 

• Abattoirs 

Reporting 

The Chief Executive Officer as the Accounting Officer has been mandated by the Board of 
Enterprise iLembe to report to the shareholder; iLembe District Municipality and any other 
relevant structures. In addition to the various Intergovernmental (IGR) structures, regular 
meetings are held between the Board of Enterprise iLembe and principals of the District. The 
CEO and management of the Entity participate and report into the following structures; 
o Economic Development Portfolio Committee 
o Executive Committee Inter-Governmental Forums 
o Provincial Forums 


The Shareholder; iLembe District Municipality also has ex-officio representation on the Board of 


2018/2019 AR - Final Draft Jan 2020 


Enterprise iLembe. 


335 



2018/2019 AR - Final Draft Jan 2020 


CHAPTER 6 - ANNUAL PERFORMANCE 
REPORTING 

In terms of section 93B of the Municipal Systems Act (MSA), the parent municipality must ensure 
that the performance objectives and indicators for the municipal Entity are established by 
agreement with the Entity and included in the municipal Entity's multi-year business plan in 
accordance with section 87 (5) (d) of the Municipal Finance Management Act (MFMA). It is for 
this reason that the report for the Enterprise iLembe has been included in the Annual 
Performance Report. 

6.1 Organisational Scorecard - Service Delivery Budget Implementation Plan 
(SDBIP) 2018/2019 

Attached hereto as \NNEXURE B 

6.2 Highlights on Actual Performance 


FINANCIAL YEAR 

TARGET MET 

% ACHIEVED 

2018/2019 

39 out of 42 

92% 

2017/2018 

38 out of 43 

88% 

2016/2017 

26 out of 35 

74% 

2015/2016 

39 out of 44 

87% 

2014/2015 

29 out of 39 

74% 

2013/2014 

21 out of 29 

72% 


336 
















2018/2019 AR - Final Draft Jan 2020 


2018/2019 Performance 


National KPA: Local Economic Development 



□ Total KPI's Target met W Target Not Met 


45 

40 

35 

30 

25 

20 

IS 

10 

5 

0 


Enterprise iLembe Performance 



Total KPIs Target Met 



Target not Met 


Enterprise iLembe continues to: 

> Improve co-ordination of Local Economic Development in the District 

> Implements and ensures sustainability of projects to upscale agriculture development in the 
District 

> Capitalises on tourism potential to increase visitor numbers in the District 

> Increases manufacturing output in the District to attract interest in investment 

> Ensures job creation by identifying and packaging new projects in existing sectors. 

PERFORMANCE HIGHLIGHTS AS PER THE ORGANISATIONAL SCORECARD AND NATIONAL KPA 
Ref Org: 19 - A total of 20 small scale farmers were identified and supported by the Entity. 



















2018/2019 AR - Final Draft Jan 2020 


The Integrated Development Plan was reviewed and adopted by Council on 29 May 2019. In 
terms of the District climate change response strategy, the project is ahead of target as the 
Consultant, which was appointed by the Department of Environmental Affairs, prepared the 
draft strategy. 

Drafting of the Integrated Waste Management Plan has been done and is currently at 
situational analysis phase. 

Quarterly LED forums are held and attended with representatives from all the local 
municipalities. Regarding new markets for farmers, report was prepared on capacitating 
farmers and engagements with Government departments by the deadline. The project of 
agricultural Hydroponic Tunnels, the Ndwedwe site is fully operational. Quarterly reports were 
prepared on the maintenance of the vineyards. The ownership model for existing projects, 
formalisation of co-operatives for handing over by June 2019 is on track and a report has been 
prepared outlining the progress status. 

Tourism potential is on track, one Community Tourism Organisation was established at Mandeni. 
Tourism marketing and development is progressing well, with six exhibitions attended, seven 
adverts/advertorials were in relevant publications, one official tourism travel guide for 2019/2020 
financial year was developed, two tourism industry research performance reports prepared and 
six events supported to increase visitors to the district. 

Two business confidence indexes were developed. Bi-annual reporting was done on the 
implementation of the investment promotion strategy. The investor prospectus was reviewed by 
end June 2019. A total of 31 business networking sessions were attended/hosted and 2 progress 
reports were prepared on the Entrepreneur competition. 

New co-operatives registered as of at end June 2019 is at 32, one hundred and eleven were 
trained on basic business skills management and 47 co-ops and SMMEs were assisted with 
funding applications. Two programmes were implemented, namely, the business incubator and 
the skills development facilitation programme. An engagement session was held with local 
municipalities to encourage local businesses to take advantage of government programmes. 

Funding was secured form the department of Labour to activate the UIF learner activation 
programme. The broadband project, funding was sourced for Phase 1 of the ICT project, it was 
secured from COGTA for the public Wi-Fi programme in Ndwedwe and Maphumulo. 


338 



2018/2019 AR - Final Draft Jan 2020 


CHALLENGES AND MEASURES TO IMPROVE PERFORMANCE AS PER THE ORGANISATIONAL 
SCORECARD AND NATIONAL KPA 


CHALLENGES 

MEASURES TO IMPROVE PERFORMANCE/ 

CORRECTIVE MEASURES 

LOCAL ECONOMIC DEVELOPMENT 

Ref OMM 34 - Only 6 planning and infrastructure alignment meetings were held due to the 
slowdown in development primarily because of the slow economic growth rate. 

Ref OMM 35 - The reviewed district growth and development plan is not yet adopted. It will be 
undertaken through the Vuthela iLembe LED programme due to unavailability of internal 

financial resources. 

Ref El 02 - Percentage produce procured from 

Local iLembe farmers is at 59% against a target of 

70%. Target was not met due to lack of 

infrastructure development, harsh weather 

conditions, seasonality of some of the 

commodities, which had to be sourced from the 

market. 

Enterprise iLembe has received funding 

from Cogta, which will be used towards 

infrastructure development; we have also 

engaged the Department of Education 

regarding the planting of substitute 
commodities to mitigate against 

seasonality. Department of Agriculture has 

also been engaged to assist with the supply 

of inputs and infrastructure development. 

Ref El 09 - The feasibility study for new tourism 

initiatives was not done. 

Project timeline changed due to change in 
scope of works. Project completion date 

will be in next financial year. 


6.3 Conclusion 

Enterprise iLembe's value statement will always be; 

"Economic Development that will change the lives of people” 


339 




ILEMBE MANAGEMENT DEVELOPMENT 
ENTERPRISE (PTY) LTD 

TRADING AS 
ENTERPRISE ILEMBE 

REGISTRATION NUMBER: 2006/032665/07 



enterprise ilembe 

ECONOMIC DEVELOPMENT AGENCY 


AUDITED ANNUAL FINANCIAL STATEMENTS 
FOR THE YEAR ENDED 
30 JUNE 2019 


340 


ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
REGISTRATION NUMBER: 2006/032665/07 

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 


CONTENTS PAGE 

General Information 1 

Chief Executive Officer's Responsibility and Approval 2 

Directors' Responsibilities and Approval! 3 

Director’s Report 4 

Statement of Financial Position 6 

Statement of Financial Performance 7 

Statement of Changes in Net Assets 8 

Cash Flow Statement 9 

Statement of Comparison of Budget and Actual Amounts 10 

Account ng Policies 13 

Notes to the Annual Financial Statements 21 

Supplementary Appendix A: Segmental Analysis of Property, Plant and 38 

Supplementary Appendix B: Segmental Statement of Financial Performance 39 

Supplementary Appendix C(1): Actual versus Budget by Vote (Revenue and 40 

Expenditure) 

Supplementary Appendix C(2): Actual versus Budget by Department (Revenue 41 

and Expenditure) 

Supplementary Appendix C(3): Actual versus Budget (Acquisition of Property, 42 

Plant and Equipment) 

Supplementary Appendix D: Disclosure of Grants and Subsid es in terms of 43 

Section 123 of the Municipal Finance Management Act, 56 of 2003 


341 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
REGISTRATION NUMBER: 2006/032665/07 

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 


General Information 


Country of Incorporation 
Legal form of entity 


South Africa 

(Pty) Ltd 


Nature of business 

Chief Executive Officer 

Chief Financial Officer 
Controlling Entity 
Auditors 

Bankers 

Postal Address 

Physical Address 

Contact No. 

Fax No. 

Web Address 


Local Economic Development, 
Tourism & Investment 


Mr Nkosinathi Nkomzwayo 


Mrs Sinegugu Mthembu 


iLembe District Municipality 


Auditor-General of South Africa 


First National Bank 


P O Box 593 

Ballito 

4420 

Sangweni Tourism Centre 
Cnr Ballito Drive and Link Road 
Ballito 
4420 

032-9461256 


032-9463515 


www.enterp rrsail Bmbe.co.za 


1 


342 




ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
REGISTRATION NUMBER: 2006/032665/07 

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 
Chief Executive Officer’s Responsibility and Approval_ 


The annual financial statements have been prepared in accordance with the Standards of Generally Recognised Accounting 
Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board. 

I am responsible for the preparation of the annual financial statements, set out on pages 6 to 43, in terms of the Company’s Act 
No. 71 of 2008 as amended and section 126 (2) of the Municipal Finance Management Act of 2003, which I have signed on 
behalf of iLembe Management Development Enterprise (Pty) Ltd. 



04-Dec-19 

Nkosinathi Nkomzwayo 

Chief Executive Officer Date 




343 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
REGISTRATION NUMBER: 2006/032665/07 

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 
Directors 1 Responsibilities and Approval_ 


The Directors are required by the Municipal Finance Management Act (Act No. 56 of 2003) and the Companies Act (Act No. 71 of 
2008 as amended) to maintain adequate accounting records and are responsible for the content and integrity of the annual 
financial statements and related information. The auditors are responsible to report on the fair presentation of these statements. 
The financial statements have been prepared in accordance with the prescribed Standards of Generally Recognised Accounting 
Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board. 

The Directors are also responsible for the company's systems of internal financial control. These are developed to provide 
reasonable, but not absolute, assurance as to the reliability of the financial statements and to adequately verify and maintain 
accountability of assets, and not absolute, assurance as to the reliability of the financial statements and to adequately verify and 
maintain accountability of assets, and to prevent and detect misstatement and loss. Nothing has come to the attention of Directors 
to indicate that any material breakdown in the functioning of these controls, procedures and systems occurred during the year 
under review. 

The annual financial statements have been prepared on the going concern basis. The Board of Directors has adopted this basis 
of accounting after having made enquiries of management and given due consideration to information presented to the Board, 
including budgets and cash flow projections for the year ahead and key assumptions and accounting policies relating thereto. 
Accordingly, the Directors have no reason to believe that the municipal entity will not continue as a going concern in the year 
ahead. 

To enable the Directors to meet these responsibilities, the Directors set standards of internal controls aimed at reducing the risk of 
error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities with a clearly defined 
framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These 
controls are monitored throughout the entity. 


All employees are required to maintain the highest ethical and integrity standards in ensuring that the municipal entity's business 
practices are concluded in a manner, which in all reasonable circumstances, is above reproach. The concept of reasonable 
assurance recognises that the control procedures should not exceed the expected benefits. The municipal entity maintains its 
internal control system through management review. Nothing has come to the attention of the Directors to indicate any breakdown 
in the functions of these internal controls during the year, which resulted in any material loss to the municipal entity. 


04-Dec-19 

Khanyisani S. Shandu 

Chairman of the Board Date 


3 


344 



fLEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
REGISTRATION NUMBER: 2006/032665/07 

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2019 
Directors* Report_ 


The following report is submitted in terms of section 30(3) of the Companies Act, 2008, for the period ended 30 June 2019. 

General Review 

The Municipal Entity was incorporated on 27 October 2008 and replaced the llembe Development Foundation which was incorporated on 8 
November 2002 and commenced business operations on 1 July 2006. The change was necessary to comply with Section 93 of the Municipal 
Systems Act. Subject to this there has been no material change in the nature or conduct of the Municipal Entity's business during the period 
under review. The financial statements adequately disclose the results of the operations for the period under review and the state of the 
Municipal Entity's affairs for the period ended 30 June 2019. 


1. Nature of Business 

The Municipal Entity has been formed as a local economic development agency of the llembe District Municipality to promote economic 
growth. The Municipal Entity was formed in terms of the Municipal Systems Act No, 32 of 2000 and the Municipal Finance Management Act 
No. 56 of 2003. 

2. Going Concern 

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. The basis presumes 
that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations 
and commitments will occur in the ordinary course of business. 

3. Material Agreement 

The Entity currently has an agreement with the Department of Education (DOE), whereby the Entity runs the National Schools Nutrition 
Program (NSNP) and DOE provides funding for this programme. There is a Sen/ice Level Agreement in this regard. 


4. Financial results of the company 

The annual financial statements on pages 2-38 set out fully the financial position and results of operations and cash flows of the Entity for the 
year ended 30 June 2019. 

5. Subsequent Events 

The Directors are not aware of any matter or circumstance arising since the end of the financial period under review that would impact on the 
fair presentation of the financial statements presented. 

6. Share Capital 

Issued share capital is 100 shares at the value of R1.00 each. 

7. Dividends 

No dividends have been proposed or declared during the year under review, nor are any recommended. 

8. Directors 


The Directors of the Entity during the year and to date of this report are as follows: 


Name 

KS Shandu - Chairperson 
AT Nzama - Deputy Chairperson 
DN Nene 
JC Oelofse 
ZS Gumede 
N Mngadi 
P Mngadi 


Details 

Appointed November 2015 
Appointed February 2017 
Appointed November 2015 
Appointed February 2017 
Appointed February 2017 
Appointed February 2017 
Appointed February 2018 


Fees for a retainer and attendance at meetings totalling R660 017 (R550 896 in June 2018) were paid during the period under review. See 
note 19 of the Annua! Financial Statements. 


4 


345 



9. Economic Entity 

As an Entity of the i Lem be District Municipality, the foliowing are applicable in terms of reporting structures: 

- The Municipal Manager of iLembe District Municipality - Mr G Kumalo 

- The Chair of the Economic Development Portfolio Committee - the Deputy Mayor of iLembe. Cllr D Shandu 

10. Directors' interest in contracts 

Fees for a retainer and attendance at meetings totalling R660 017 (R550 896 in June 2018) were paid during the period under review. See 
note 19 of the Annual Financial Statements. The Directors have declared interest in companies they are part of, but none that are linked to 
the Entity. 

11. Corporate Governance 
11.1 Board Meetings 

The Board has 2 sub committees outside of the Board. As a Board, they are required to meet at least 4 times annually. The schedule below 
indicates the meetings held during the 2018/2019 financial year and attendance thereof. 


Name 


Board 

Committee 


LED and 
Investment 


HR and 
Finance 


Number of meetings 


6 4 5 


KS Shandu - Board Chairperson 6 

AT Nzama ■ Deputy Board Chairperson 3 

DN Nene - HR & Finance Sub-Committee C 3 

JJC Oelofse 4 

IS Gumede 6 

N Mngadi 4 

B Mngadi 5 


4 

2 

N/A 

4 

4 

N/A 

N/A 


N/A 

N/A 

2 

5 

2 

3 

5 


11.2 Audit Committee Meetings 

The Audit Committee currently comprises of independent, external members and is required to meet at least 4 times per annum as per the 
MFMA. Additional meetings may be called for as the need arise. 5 meet-ngs were held during the 2018/2019 financial year. Members' 
attendance at the meetings is listed below: 


Number of Meetings Attended 

Name 


S Hlophe - Chairperson 5 

S Gertze 4 

Z. Bongekile 3 

S.L Ndlovu 4 


s 


346 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 

STATEMENT OF FINANCIAL POSITION 

ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


Note 2019 

R 


2018 

R 


ASSETS 


Current assets 


32 939 577 

12 026 368 

Vat Receivable 

3 

3 020 481 


345 841 

Inventory 

4 

243 680 


283 018 

Trade and Other Receivables 

11 

9 446 043 


6 287 290 

Cash and cash equivalents 

12 

20 229 373 


5 110 218 


Non-current assets 


28 940 488 

24 470 597 

Property, Plant and Equipment 

7 

28 350 488 


24 079 197 

Biological Assets 

8 

590 000 


391 400 


Total Assets 61 880 065 36 496 964 


LIABILITIES 


Current liabilities 27 361 433 5133 408 


Trade and Other Payables 

1 

11 300 455 


3 074 160 

Provisions 

1 

1 641 270 


1 227 880 

Unspent Conditional Grants and Receipts 

2 

13 501 744 


831 369 

Finance Lease Liability 

5 

917 964 


- 


Non-current liabilities 

Finance Lease Liability 5 1 160 745 


Total Liabilities 

Net Assets 


28 522179 5133 408 


33,357,887 31,363,556 


NET ASSETS 


Accumulated Surplus 


33 357 787 


31 363 456 

Issued Share Capital 

10 

100 


100 


Total Net Assets 


33,357,887 31,363,556 


6 


347 




ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 

STATEMENT OF FINANCIAL PERFORMANCE 

ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 



Note 

2019 

2018 

REVENUE 


R 

R 

Revenue from exchange transactions 




Rental Income 

13 

84 348 

66 087 

Interest Received 

14 

819 837 

273 047 

Other Income 

16 

1 317 794 

106 764 

National Schools Nutrition Income 

17 

21 371 976 

18 031 479 

Gain on Assets Adjustment 

26 

747 570 

1400 

Total Revenue from exchange transactions 


24 341 524 

18 478 777 

Revenue from non-exchange transactions 




Government grants and subsidies 

15 

47 778 912 

24 829 416 

Total Revenue 


72 120 436 

43 308 193 

EXPENDITURE 




Depreciation, Amortisation & impairment 

6 

2 107 851 

1 163 571 

Employee Related Costs 

18 

18 057 150 

14 356 698 

Directors Fees 

19 

660 017 

550 856 

Repairs and Maintenance 

20 

1 091 025 

2119131 

Contracted Services 

21 

20 582 175 

15 602 380 

General Expenses 

22 

27 731 439 

6 748 664 

Loss on Disposal 

26 

19 175 

39 945 

Total Expenditure 


70 248 833 

40 581 244 

Surplus / (Deficit) for the year 

- 

1 871 603 

2 726 949 


7 


348 




ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 

STATEMENT OF CHANGES IN NET ASSETS 

ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 



Note 

Shares 

R 

Accumulated 

Surolus/ 

(Deficit) 

R. 

Total Net 
Assets 

R 

Opening Balance 1 July 2017 


100 

28,771,200 

28 771 300 

Surplus for the year 


. 

1 708 579 

1 708 579 

Adjustments 


- 

2 626 371 

2 626 371 

Balance at 30 June 2018 


100 

33,106,150 

33,106,250 

Prior period error 

29 

- 

(1 742 694) 

( 1 742 694) 

Restated Balance at 30 June 2018 


100 

31,363,456 

31,363,556 

Opening Balance 1 July 2018 


100 

31,363,456 

31 363 556 

Surplus for the year 


- 

1,871,603 

1 871 603 

Adjustments 


- 

122 628 

122 628 

Balance at 30 June 2019 


100 

33,357,687 

33 357 787 


6 


349 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
CASH FLOW STATEMENT 

ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 



Note 

2019 

2018 



R 

R 

CASH FLOWS FROM OPERATING ACTIVITIES 




Cash receipts government and other 


105 539 928 

45 360 667 

Cash paid to suppliers and employees 


(83 209 391) 

(35 839 628) 

Cash generated/{utilised) from operations 

24 

22 330 537 

9 521 039 

interest received 

14 

819 837 

273 047 

NET CASH FLOWS FROM OPERATING ACTIVITIES 


23 150 375 

9 794086 

CASH FLOWS FROM INVESTING ACTIVITIES 




Purchase of property, plant and equipment 

7.8.9 

( 1 416 931) 

( 299 903) 

Increase in current investments 


(5 913 079) 

(4 904 313) 

NET CASH FLOWS FROM INVESTING ACTIVITIES 

= 

(7 330 009) 

{5 204 216) 

CASH FLOWS FROM FINANCING ACTIVITIES 




Loans raised - leases 


( 701 210) 

- 

NET CASH FLOWS FROM FINANCING ACTIVITIES 

- 

( 701 210) 

- 

NET DECREASE IN CASH AND CASH EQUIVALENTS 

- 

15119155 

4 589 870 

CASH AND CASH EQUIVALENTS AT THE BEGINNING 




OF THE YEAR 


5110 218 

520 348 

CASH AND CASH EQUIVALENTS AT THE END OF THE 

— 

- - 


YEAR 

25 

20 229 373 

5110218 




ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
STATEMENT OF COMPARISON OF BUDGET & ACTUAL AMOUNTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


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352 





ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 

1 BASIS OF PREPARATION 

1.1 STATEMENT OF COMPLIANCE 

These annual financial statements have been prepared in accordance with the effective Standards of Generally Recognised Accounting 
Practice (GRAP), including any interpretations and directives issued by the Accounting Standards Board in accordance with Section 122(3) 
of the Municipal Finance Management Act, (Act No 56 of 2003). 

The accounting policies applied are consistent with those used to present the previous year’s financial statements, unless explicitly stated. 
The details of any changes in accounting policies are explained in the relevant policy. 

1.2 BASIS OF MEASUREMENT 

The annual financial statements have been prepared on an accrual basis of accounting and are in accordance with the historical cost 
convention as the basis measurement, unless specified otherwise. 

1.3 FUNCTIONAL AND PRESENTATION CURRENCY 

These annual financial statements are presented in South African Rand, which is the functional currency of the municipal entity. All financial 
information has been rounded to the nearest Rand. 

1.4 OFFSETTING 

Financial assets and liabilities are set off and the net amount presented in the statement of financial position when, and only when, the 
municipal entity has a legal right to set off the amounts and intends either to settle on a net basis or to realise the asset and settle the liability 
simultaneously. 

Revenue and expenses have not been offset except when offsetting is required or permitted by a standard of GRAP. 

1.5 GOING CONCERN ASSUMPTION 

These annual financial statements have been prepared on the assumption that the municipal entity will continue to operate as a going 
concern for at least the next 12 months. 

1.6 USE OF ESTIMATES AND JUDGEMENTS 

The preparation of financial statements in comformity with GRAP requires management to make judgements, estimates and assumptions 
that affect the application of policies and reported amounts assets and liabilities, income and expenses. The estimates and associated 
assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the 
results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from 
other sources. Actual results may differ from these estimates. 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the 
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision 
affects both current and future. 

1.7 COMPARATIVE INFORMATION 

When the presentation or classification of items in the annual financial statements is amended, prior period comparative amounts are 
restated. The nature and reason for the reclassification is disclosed. Where accounting errors have been identified in the current year, the 
correction is made retrospectively as far as is practicable, and the prior year comparatives are restated accordingly. Where there has been a 
change in accounting policy in the current year, the adjustment is made retrospectively as far as is practicable, and the prior year 
comparatives are restated accordingly.The municipal entity shall present a comparison of budget and actual amounts as additional budget 
columns in the primary financial statements only where the financial statements and the budget are prepared on a comparable basis. All 
comparisons of budget and actual amounts shall be presented on a comparable basis to the budget. The municipality shall explain in notes 
to the financial statements the budgetary basis and classification basis adopted in the approved budget. 

1.8 STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE 


The following GRAP standards have been issued but are not yet effective and have not been early adopted by the municipal entity. 

GRAP 20 Related Party Disclosures - issued June 2011 

GRAP 32 Service Concession Arrangements: Grantor - issued August 2013 

GRAP 108 Statutory Receivables - issued September 2013 

GRAP 109 Accounting by Principals and Agents 

IGRAP 17 Service Concession Arrangements where a Grantor Controls a significant residual interest in an asset 

Management have considered all of the above mentioned GRAP standards approved or issued but not yet effective and anticipates that the 
adoption of these standards will not have a significant on the financial position, financial performance or cashflows of the entity. 


13 


354 



2. SIGNIFICANT ACCOUNTING POLICIES 

The following significant accounting policies had been applied consistently during the current and previous reporting, as set out in the note 
1.2. been applied 

2.1 PROPERTY. PLANT AND EQUIPMENT 

2.1.1 INITIAL RECOGNITION 

Property, plant and equipment are tangible non-current assets that are held for use in the production or supply of goods or services, rental to 
others, or for administrative purposes, and are expected to be used during more than one year. Items of property, plant and equipment are 
initially recognised as assets on acquisition date and are initially recorded at cost. The cost of an item of property, plant and equipment is the 
purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the 
manner intended by the municipal entity. Trade discounts and rebates are deducted in arriving at the cost. The cost also includes the 
necessary costs of dismantling and removing the asset and restoring the site on which it is located. 

When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate 
items (major components) of property, plant and equipment. 

Where an asset is acquired by the municipal entity for no or nominal consideration (i.e. a non-exchange transaction), the cost is deemed to 
be equal to the fair value of that asset on the date acquired. 

Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of 
monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item's fair value was not 
determinable, it's deemed cost is the carrying amount of the asset(s) given up. 

Major spare parts and servicing equipment qualify as property, plant and equipment when the municipal entity expects to use them during 
more than one period. Similarly, if the major spare parts and servicing equipment can be used only in connection with an item of property, 
plant and equipment, they are accounted for as property, plant and equipment. 

2.1.2 SUBEQUENT MEASUREMENT - COST MODEL 

Subsequent to initial recognition, items of property, plant and equipment are measured at cost less accumulated depreciation and 
impairment losses. Land is not depreciated as it is deemed to have an indefinite useful life. 

Where the municipal entity replaces parts of an asset, it derecognises the part of the asset being replaced and capitalises the new 
component. Subsequent expenditure incurred on an asset is capitalised when it increases the capacity or future economic benefits 
associated with the asset. 

2.1.3 DEPRECIATION AND IMPAIRMENT 

Depreciation is calculated on the depreciable amount, using the straight-line method over the estimated useful lives of the assets. 

Furniture and equipment 7-10 years 

Machinery and equipment 5-10 years 

Computer equipment 5 years 

Agriculture PPE 10-30 years 

Buildings 30 years 

Motor Vehicles (Leases) 3 years 

The residua! value, the useful life of an asset and the depreciation method is reviewed annually and any changes are recognised as a 
change in accounting estimate in the Statement of Financial Performance. 

The municipal entity tests for impairment where there is an indication that an asset may be impaired. An assessment of whether there is an 
indication of possible impairment is done at each reporting date. Where the carrying amount of an item of property, ptant and equipment is 
greater than the estimated recoverable amount (or recoverable service amount), it is written down immediately to its recoverable amount (or 
recoverable service amount) and an impairment loss is charged to the Statement of Financial Performance. 


2.1.4 DERECOGNITION 

Items of Property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic benefits or 
service potential expected from the use of the asset. The gain or loss arising on the disposal or retirement of an item of property, plant and 
equipment is determined as the difference between the sales proceeds and the carrying value and is recognised in the Statement of 
Financial Performance. 

2.15 LEASED ASSETS 

Leases in terms of which the municipal entity assumes substantially all the risks and rewards of ownership are classified as finance leases. 
Other leases are classified as operating leases. Upon initial recognition of assets leased under finance leases, the leased asset is measured 
at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the 
asset is accounted for in accordance with the accounting policy applicable to that asset. 


14 


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3 BIOLOGICAL ASSETS 


3.1 INITIAL RECOGNITION 

Biological assets are fair valued at the end of each accounting period. Biological assets that have not produced crops are 
valued at cost while in the case where crops are present the value of the crop at the end of the accounting period is taken 
into account to arrive at the fair value. 

3.2 SUBEQUENT MEASUREMENT 

Subsequent to initial recognition, biological assets are measured at fair value less estimated cost to sell 

3.3 DERECOGNITION 

Biological assets are derecognized when they are impaired. An independent expert valuer will evaluate the assets to get the fair value at the 
of the financial year The report from the valuer is then used to adjust the fixed asset register The gains or losses are recognized in 
accumulated surplus or deficit. 


4 INTANGIBLE ASSETS 

4.1 INITIAL RECOGNITION 

An intangible asset is an identifiable non-monetary asset without physical substance. Examples include computer software, licences, and 
development costs. The municipal entity recognises an Intangible asset in its Statement of Financial Position only when it is probable that 
the expected future economic benefits or service potential that are attributable to the asset will flow to the municipal entity and the cost or fair 
value of the asset can be measured reliably. 

Internally generated intangible assets are subject to strict recognition criteria before they are capitlised. Research expenditure is never 
capitalised* while development expenditure is only capitalised to the extent that: 

* the municipal entity intends to complete the intangible asset for use or sale; 

* it is technically feasible to complete the intangible asset; 

* the municipal entity has the resources to complete the project and 

* it is probable that the municipal entity wiii receive future economic benefits or serv ce potential. 

Intangible assets are initially recognised at cost. 

Where an intangible asset is acquired by the municipal entity for no or nominal consideration (i.e, a non-exchange transaction), the cost is 
deemed to be equal to the fair value of that asset on the date acquired. 

Where an intangible asset is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non¬ 
monetary assets, the asset acquired is initially measured at fa : r value (the cost}. If the acquired item's fair value was not determinable, it's 
deemed cost is the carrying amount of the asset(s) given up. 


4.2 SUBEQUENT MEASUREMENT - COST MODEL 

Intangible assets are subsequently carried at cost less accumulated amoritisation and impairments. The cost of an intang ble asset is 
amortised over the useful life where that useful life is finite. Where the useful life is indefinite, the asset is not amortised but is subject to an 
annual impairment test. 


4.3 AMORTISATION AND IMPAIRMENT 

Amortisation is charged so as to write off the cost or valuation of intangible assets over their estimated useful lives using the straight line 
method. The annual amortisation rates are based on the following estimated average asset lives: 

Computer software and websites 5 years 

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at each reporting date and 
any changes are recognised as a change in acounting estimate in the Statement of Financial Performance. 

The municipal entity tests intangible assets with finite useful lives for impairment where there is an indication that an asset may be impaired. 
An assessment of whether there is an indication of possible impairment is done at each reporting date. Where the carrying amount of an 
item of an intangible asset is greater than the estimated recoverable amount (or recoverable service amount), it is written down immediately 
to its recoverable amount (or recoverab e service amount) and an impairment loss is charged to the Statement of Financial Performance. 


TS 


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4.4 DERECOGNITION 

Intangible assets are derecognised when the asset is disposed of or when there are no further economic benefits or service potential 
expected from the use of the asset. The gain or loss arising on the disposal or retirement of an intangible asset is determined as the 
difference between the sales proceeds and the carrying value and is recognised in the Statement of Financial Performance. 


5 INVESTMENT PROPERTY 

5.1 INITIAL RECOGNITION 

investment property includes property (land or a building, or part of a building, or both land or buildings held under a finance lease) held to 
earn rentals and/or for capital appreciation, rather than held to meet service delivery objectives, the production or supply of goods or 
services, or the sale of an asset in the ordinary course of operations. 

At initial recognition, the municipal entity measures investment property at cost including transaction costs once it meets the definition of 
investment property. However, where an investment property was acquired through a non-exchange transaction (i.e. where it acquired the 
investment property for no or a nominal value), its cost is its fair value as at the date of acquisition. 

The cost of self-constructed investment property is the cost at date of completion. 

5.2 SUBSEQUENT MEASUREMENT - FAIR VALUE MODEL 

Investment property is measured using the fair value model. Under the fair value model, investment property is carried at its fair value at the 
reporting date. Any gain or loss arising from a change in the fair value of the property is included in surplus or deficit for the period in which 
it arises. 


6 INVENTORIES 

6.1 INITIAL RECOGNITION 

Inventories comprise current assets held for sale, consumption or distribution during the ordinary course of business. Inventories are 
initially recognised at cost. Cost generally refers to the purchase price, excluding taxes, transport costs and any other costs in bringing 
inventories to their current location and condition. Where inventory is manufactured, constructed or produced, the cost includes the 
cost of labour, material and overheads used during the manufacturing process. 

6.2 SUBSEQUENT MEASUREMENT 

Inventories, consisting of consumable stores, raw materials, work-in-progress and finished goods, are valued at the lower of cost and 
net realisable value unless they are to be distributed at no or nominal charge, in which case they are measured at the lower of cost and 
current replacement cost. Redundant and slow-moving inventories are identified and written down in this way. Differences arising on 
the valuation of inventory are recognised in the Statement of Financial Performance in the year in which they arose. The amount of any 
reversal of any write-down of inventories arising from an Increase in net realisable value or current replacement cost is recognised as 
a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. 

The carrying amount of inventories is recognised as an expense in thft period that the inventory was sold, distributed, written off or 
consumed, unless that cost qualifies for capitalisation to the cost of another asset. 

The basis of allocating cost to inventory Items is the first in f rst out method. 


7 FINANCIAL INSTRUMENTS 


7.1 INITIAL RECOGNITION 

Financial instruments are initially recognised at fair value. The entity recognises a financial asset or a financial liability in its Statement of 
Financial Position when, and only when the entity becomes a party to the contractual provisions of this instrument. 


7.2 SUBSEQUENT MEASUREMENT 

Financial Assets are categorised according to their nature as either financial assets at fair value through profit or loss, held-to maturity, loans 
and receivables, or available for sale. Financial liabilities are categorised as either at fair value through profit or loss or financial liabilities 
carried at amortised cost ("other"). The subsequent measurement of fnancia 1 assets and liabilities are measured either at fair value or 
amortised cost or cost. 

7.2.1 INVESTMENTS 

Investments, which include listed government bonds, unlisted municipal bonds, fixed deposits and short-term deposits invested in registered 
commercial banks, are categorised as either held*to-maturity where the criteria for that categorisation are met, or as loans and receivables, 
and are measured at amortised cost. Where investments have been impaired, the carrying value is adjusted by the impairment loss, which is 
recognised as an expense in the period that the impairment is identified, impairments are calculated as being the difference between the 
carrying amount and the present value of the expected future cash flows flowing from the instrument. On disposal of an investment, the 
difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Financial Performance. 


16 


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7.2.2 TRADE AND OTHER RECEIVABLES 

Trade and other receivables are categorised as financial assets: loans and receivables and are initially recognised at fair value and 
subsequently carried at amortised cost. Amortised cost refers to the initial carrying amount, plus interest, less repayments and impairments. 
An estimate is made for doubtful receivables based on a review of all outstanding amounts at year-end. Significant financial difficulties of the 
debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 
days overdue) are considered indicators that the trade receivable is impaired. Impairments are determined by discounting expected future 
cash flows to their present value. Amounts that are receivable within 12 months from the reporting date are classified as current. 


An impairment of trade receivables is accounted for by reducing the carrying amount of trade receivables through the use of an allowance 
account, and the amount of the loss is recognised in the Statement of Financial Performance within operating expenses. When a trade 
receivable is uncollectible, it is written off. Subsequent recoveries of amounts previously written off are credited against operating expenses 
in the Statement of Financial Performance. 

7.2.3 TRADE PAYABLES AND BORROWINGS 

Financial liabilities consist of trade payables and borrowings. They are categorised as financial liabilities held at amortised cost, are initially 
recognised at fair value and subsequently measured at amortised cost which is the initial carrying amount, less repayments, plus interest. 


7.2.4 CASH AND CASH EQUIVALENTS 

Cash includes cash on hand (including petty cash) and cash with banks (including call deposits). Cash equivalents are short-term highly 
liquid investments, readily convertible into known amounts of cash, that are held with registered banking institutions with maturit es of three 
months or less and are subject to an insignificant risk of change in value. For the purposes of the cash flow statement, cash and cash 
equivalents comprise cash on hand, deposits held on cal! with banks, net of bank overdrafts. The municipal entity categorises cash and cash 
equivalents as financial assets; loans and receivables. 

Bank overdrafts are recorded based on the facility utilised. Finance charges on bank overdraft are expensed as incurred. Amounts owing in 
respect of bank overdrafts are categorised as financial liabilities: other financial NabiEties carried at amortised cost. 


8 UNAUTHORISED EXPENDITURE 

Unauthorised expenditure is expenditure that has not been budgeted, expenditure that is not in terms of the conditions of an allocation 
received from another sphere of government, municipality or organ of state and expenditure in the form of a grant that is not permitted in 
terms of the Municipal Finance Management Act (Act No.56 of 2003). Unauthorised expenditure is accounted for as an expense in the 
Statement of Financial Performance and where recovered, it is subsequently accounted for as revenue in the Statement of Financial 
Performance. If the expenditure is not condoned by the relevant authority, it is treated as a receivable, if it meets the definition and the 
recognition criteria of an asset, in the statement of financial position until it is recovered or written off as irrecoverable. 

9 IRREGULAR EXPENDITURE 

Irregular expenditure is expenditure that is contrary to the Municipal Finance Management Act (Act No.56 of 2003). the Municipal Systems 
Act (Act No.32 of 2000), the Public Office Bearers Act (Act No. 20 of 1998) or is in contravention of the Municipal Entity's supply chain 
management policy. Irregular expenditure excludes unauthorised expenditure. Irregular expenditure is accounted for as expenditure in the 
Statement of Financial Performance and where recovered, it is subsequently accounted for as revenue in the Statement of Financial 
Performance. If the expenditure is not condoned by the relevant authority, it is treated as a receivable, if it meets the definition and the 
recognition criteria of an asset, in the statement of financial position until it is recovered or written off as irrecoverable. 


10 FRUITLESS AND WASTEFUL EXPENDITURE 

Fruitless and wasteful expenditure is expend ture that was made in vain and would have been avoided had reasonable care been exercised. 
Fruitless and wasteful expenditure is accounted for as expenditure in the Statement of Financial Performance and where recovered, it is 
subsequently accounted for as revenue in the Statement of Financial Performance. If the expenditure is not condoned by the relevant 
authority, it is treated as a receivable, if it meets the definition and the recognition criteria of an asset, in the statement of financial position 
until it is recovered or written off as irrecoverable. 


17 


358 



11 LEASES 


, MUNICIPAL ENTITY AS LESSEE 

11.1 

Leases are classified as finance leases where substantially all the risks and rewards associated with ownership of an asset are transferred 
to the municipal entity. 

Initial Recognition 

Property, plant and equipment or intangible assets subject to finance lease agreements are initially recognised at the lower of the asset's fair 
value and the present value of the minimum lease payments. 

Measurement 

The corresponding liabilities are initially recognised at the inception of the lease and are measured as the sum of the minimum lease 
payments due in terms of the lease agreement, discounted for the effect of interest. In discounting the lease payments, the municipal entity 
uses the interest rate that exactly discounts the lease payments and unguaranteed residual value to the fair value of the asset plus any direct 
costs incurred. 

Subsequent Recognition 

Subsequent to initial recognition, the leased assets are accounted for in accordance with the stated accounting policies applicable to 
property, plant, equipment or intangibles. The lease liability is reduced by the lease payments, which are allocated between the lease 
finance cost and the capita! repayment using the effective interest rate method. Lease finance costs are expensed when incurred. The 
accounting policies relating to derecognition of financial instruments are applied to lease payables. The lease asset is depredated over the 
shorter of the asset's useful life or the lease term. 

Operating leases are those leases that do not fall within the scope of the above definition. Operating lease rentals are accrued on a straight- 
line basis over the term of the relevant lease. 

„ MUNICIPAL ENTITY AS LESSOR 

11.2 

Under a finance lease, the municipal entity recognises the lease payments to be received in terms of a lease agreement as an asset 
(receivable). The receivable is calculated as the sum of ail the minimum lease payments to be received, plus any unguaranteed residual 
accruing to the municipal entity, discounted at the interest rate implicit in the tease. The receivable is reduced by the capital portion of the 
lease instalments received, with the interest portion being recognised as interest revenue on a time proportionate basis. The accounting 
polides relating to derecognition and impairment of financial instruments are applied to lease receivables. 

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. 


12 REVENUE 

_ „ REVENUE FROM EXCHANGE TRANSACTIONS 

12.1 

Revenue from exchange transactions refers to revenue that accrued to the municipal entity directly in return for services rendered / goods 
sold, the value of which approximates the consideration received or receivable. 

Recognition 

Interest revenue is recognised on a time proportion basis. 

Revenue from the rental of facilities and equipment is recognised on a straight-line basis over the term of the lease agreement. 

Revenue from the sale of goods is recognised when substantially all the risks and rewards in those goods is passed to the consumer. 

Revenue arising out of situations where the municipal entity acts as an agent on behalf of another entity (the prindpal) is limited to the 
amount of any fee or commission payable to the municipality as compensation for executing the agreed services. 

Measurement 

Monetary arising out of a contractual agreement, such as cash and race vab es are initially mesured at fair value on acquisition date. 


n 


359 



REVENUE FROM NON-EXCHANGE TRANSACTIONS 

12.2 

Revenue from non-exchange transactions refers to transactions where the municipal entity received revenue from another entity without 
directly giving approximately equal value in exchange. Revenue from non-exchange transactions is generally recognised to the extent that 
the the related receipt or receivable qualifies for recognition as an asset and there is no liability to repay the amount. 


Revenue from public contributions and donations is recognised when all conditions associated with the contribution have been met or where 
the contribution is to finance property, plant and equipment, when such items of property, plant and equipment qualifies for recognition and 
first becomes available for use by the municipal entity. Where public contributions have been received but the municipal entity has not met 
the related conditions, a deferred income (liability) is recognised. 

Contributed property, plant and equipment is recognised when such items of property, plant and equipment qualifies for recognition and 
become available for use by the municipal entity. 

Revenue from the recovery of unauthorised, irregular, fruitless and wasteful expenditure is based on legislated procedures, including those 
set out in the Municipal Finance Management Act (Act No.56 of 2003) and is recognised when the recovery thereof from the responsible 
councillors or officials is virtually certain. 

12.3 GRANTS, TRANSFERS AND DONATIONS 

Grants, transfers and donations received or receivable are recognised when the resources that have been transferred meet the criteria for 
recognition as an asset. A corresponding liability is raised to the extent that the grant, transfer or donation is conditional. The liability is 
transferred to revenue as and when the conditions attached to the grant are met. Grants without any conditions attached are recognised as 
revenue when the asset is recognised. 

13 VALUE ADDED TAX (VAT) 

The municipal entity accounts for VAT on the cash basis. The municipal entity is liable to account for VAT at the standard rate 15% (14% 
until 31 March 2018) in terms of section 7 (1) (a) of the VAT Act in respect of the supply of goods or services, except where the supplies are 
specifically zero-rated in terms of section 11, exempted in terms of section 12 of the VAT Act or is out of scope for VAT purposes. The 
municipal entity accounts for VAT on a bi-monthly basis. 

14 INCOME TAX 

The municipal entity is registered for income tax purposes and is liable for income tax at the corporate rate of 28%. Income tax returns are 
up to date as at 30 June 2017. Current year tax return will be submitted by due date. 

15 RELATED PARTIES 

Individuals as well as their close family members, and/or entities are related parties if one party has the ability, directly or 
indirectly, to control; or jointly control the other party or exercise significant influence over the other party in making financial 
and/or operating decisions. 

16 EVENTS AFTER THE REPORTING DATE 

Events after the reporting date that are classified as adjusting events have been accounted for in the annual financial statements. 

The events after the reporting date that are classified as non-adjusting events after the reporting date have been disclosed in the 
notes to the annual financial statements. 

17 IMPAIRMENT OF ASSETS 

17.1 Recognition 

The municipal entity assesses at each reporting date whether there is any indication that an asset may be impaired. If any such indication 
exists, the municpal entity estimates the recoverable service amount of the asset. 

Irrespective of whether there is any indication of impairment, the municipal entity also: 

- tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its 
carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period. 




360 



17.2 Measurement 

If there is any indication that an asset may be impaired, the recoverable service amount is estimated for the individual asset If it is not 
possible to estimate the recoverable service amount of the individual asset, the recoverable service amount of the cash-generating unit to 
which the asset belongs is determined. 

The recoverable service amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. 


If the recoverable sen/ice amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable 
service amount. That reduction is an impairment loss. 

An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in surplus or 
deficit. Any impairment loss of a revalued asset is treated as a revaluation decrease. 

An impairment loss is recognised for cash-generating units if the recoverable service amount of the unit is less than the carrying amount of 
the unit. The impairment loss is allocated to reduce the carrying amount of the assets of the unit as follows: 

- to the assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit. 


17.3 Reversal of Impairment 

The municipal entity assesses at each reporting date whether there is any indication that an impairment loss recognised in prior periods for 
assets may no longer exist or may have decreased. If any such indication exists, the recoverable service amounts of those assets are 
estimated. 

The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would 
have been determined had no impairment loss been recognised for the asset in prior periods. 

A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation is recognised immediately in 
surplus or deficit. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase. 

18 EMMPLOYEE BENEFITS 

18.1 Short-Term Employee Benefits 

The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and 
sick leave, bonuses and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered. 

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement 
or, in the case of non-accumulating absences, when the absence occurs. 

The expected cost of bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments 
as a result of past sen/ice or performance and the obligation can be estimated reliably. 

Liabilities for short-term employee benefits that are unpaid at year-end are measured at the undiscounted amount that the entity expects to 
pay in exchange for that service and had accumulated at the reporting date. 


18.2 Post-Employment Benefits 

18.2.1 Defined Contribution Plans 

A defined contribution plan is a plan under which the entity pays fixed contributions into a separate entity. The entity has no legal or 
constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay employees ail the benefits relating to 
service in the current or prior periods. 

The entity's contributions to the defined contribution funds are established in terms of the rules governing those plans. Contributions are 
recognised in surplus or deficit in the period in which the service is rendered by the relevant employees, unless another standard requires or 
permits the inclusion of the contribution in the cost of an asset. Prepaid contributions are recognised as an asset to the extent that a cash 
refund or a reduction in future payments is available. 

The expected cost of bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments 
as a result of past sen/ice or performance and the obligation can be estimated reliably. 

18.2.2 Termination Benefits 

Termination benefits are recognised as an expense when the entity :s committed demonstrably, without realistic possibility of withdrawal, to a 
formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an 
offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the entity 
has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be est mated 
reliably. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value. 


20 


361 



1LEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 

2018 
R 


2019 

R 


1 PAYABLES & PROVISIONS 


1.1 Payables 

Payables from exchange transaction 4,403,877 2 735 057 

Creditor Accruals 6,523,500 

Other Creditors _ 373,078 _ 339 103 

Total Creditors 11 300 455 3 074160 


1.2 Provision for Leave 

Opening balance 1 227 880 829 088 

Movement 413,390 398 792 

Closing Balance 1 641 270 1 227 880 


Total Payables 12 941 725 4 302 040 


2 UNSPENT CONDITIONAL GRANTS AND RECEIPTS 


UIF Grant 

3,671,505 

■ 

SASA Grant 

22,224 

- 

COGTA RASET Grant 

3,759,707 

- 

COGTA BIOMASS Grant 

1,681,326 

■ 

COGTA YEP Grant 

744,034 

- 

COGTA Public Wi Fi Grant 

1,317,667 


COGTA Mini Factories Grant 

2,173,913 


Maphumulo IEC Grant 

- 

700 000 

District Growth and Development Summit 

131 369 

131 369 

Total Conditional Grants and Receipts 

13 501 744 

831 369 


The increase in unspent grants from the last financial year is as a result of additional grant funded allocated to the 
Entity during the 2018/2019 financial year. 


3 VALUE ADDED TAXATION 


Vat Receivable 3 020 481 345 841 


4 INVENTORY 

Opening Balance 
Add: Purchases 
Add: Current Year Harvest 
Less: Sales 

Less: Marketing & Promotion Material 
Balance as at year end 

Inventory comprise of own produce - bottled 


283 018 

178 265 

- 

132 306 

19 156 

- 

(34 485) 

(27 553) 

(24 009) 

- 

243 680 

283 018 

283 018 


unbottled as well as wine purchased for resale. 


21 


362 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


2019 2018 

R R 


5 FINANCE LEASE LIABILITY 


Minimum lease payments due 

- within one year 934 947 

- in second to fifth year inclusive 1 168 684 

2 103 630 

less: future finance charges _ 24 921 

Present value of minimum lease payments 2 078 709 


Present value of minimum lease payments due 

- within one year 917 964 

- in second to fifth year inclusive 1 160 745 

2 078 709 


Non-current liabilities 
Current liabilities 


1 160 745 
917 964 

2 078 709 


The Entity leases its motor vehicles with Avis and due to the substance of these agreements, they are recognized 
and disclosed as finance leases. The lease term is 36 months and the interest rate implicit on the agreement is 
0,085% per month. Interest rates are generally considered to be fixed at the contract date given the nature of the 
agreement. All leases have fixed repayments. 


6 DEPRECIATION, AMORTISATION & IMPAIRMENT 


Depreciation 2 078 668 1 162 099 

Amortisation - 1 472 


Impairment 


29184 _ ; 

2107 851 1 163 571 


22 


363 



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Public Wifi (Computer Equipment) - This expenditure relates to the hardware that has been purchased for the installation of Public Wi-Pi. The project will be 

completed in 2019/2020 856,246 




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367 




ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


2019 2018 

R R 


10 ISSUED SHARE CAPITAL 

Name of company 
llembe District Municipality 

Carrying amount 100 100 

% Holding _100% _100% 


Ordinary Shares: 103 @ R1 each 
11 RECEIVABLES 


11.1 Receivables from Exchange Transactions 

Provincial Department of Education fl,947,983 5 325 361 

SARS 102*113 224 280 

Other Debtors _ 277*796 _ 64 674 

Total Receivables from Exchange Transactions 9,327,893 5 614 315 


11.2 Other Receivables 

llembe District Municipality - 646 625 

Deposits _ 118,150 _ 26 350 

Total Receivables from non-exchange transactions 118,150 _672 975 


Total Receivables _9,446,043 6 287 290 


12 CASH AND CASH EQUIVALENTS 

12.1 Bank Accounts 

12.1.1 Rocabex - Trust Bank Account - Kloof Branch 
First National Bank Account 

Account Number 62347813471: Current Account 

Cash book balance at the begining of the year _ 205*218 _ 205 218 

Cash book balance at the end of the year _ 204,873 _ 205 218 


Bank statement balance at the begining of the year _ 205*218 _ 205 218 

Bank statement balance at the end of the year _ 204,873 _ 205 218 


12.1.2 First National Bank Account - Main Bank Account - Stanger Branch 
Account Number 62450574077: Cheque Account 

Cash book balance at the begining of the year 
Cash book balance at the end of the month 

Bank statement balance at the begining of the year 
Bank statement balance at the end of the month 

12.1.3 First National Bank Account - UIF Account - Stanger Branch 
Account Number 62804908286: Corporate Cheque Account 

Cash book balance at the begining of the year 
Cash book balance at the end of the month 

Bank statement balance at the begining of the year 
Bank statement balance at the end of the month 

Total Bank Accounts 

Petty Cash 


91 

2,809,995 


_91_ 

2,809,995 


5,809,093 


5,809,093 

8,823,961 

716 

8,824,677 


308 223 
_ 91 

308 223 

91 


205 309 


596 
205 905 


2? 


368 


ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


12.2 Current Investments 

12.2.1 First National Bank Account - Business Investment Desk Branch 

Account Number 74767676876 Fixed Maturity Notice 

Cash book balance at the begining of the year 
Cash book bafance at the end of the year 

Bank statement balance at the begining of the year 
Bank statement balance at the end of the year 

12.2.2 First National Bank Account - Business Investment Desk Branch 
Account Number 74767678161 Fixed Maturity Notice 

Cash book balance at the begining of the year 
Cash book balance at the end of the year 

Bank statement balance at the begining of the year 
Bank statement balance at the end of the year 

12.2.3 First National Bank Account - Business Investment Desk Branch 
Account Number 74769875781 Fixed Maturity Notice 

Cash book balance at the bagining of the year 
Cash book balance at the end of the year 

Bank statement balance at the begining of the year 
Bank statement balance at the end of the year 

12.2.4 First National Bank Account - Business Investment Desk Branch 
Account Number 62602914138 - Call Account 

Cash book balance at the begining of the year 
Cash book balance at the end of the year 

Bank statement balance at the begining of the year 
Bank statement balance at the end of the year 

12.2.5 Investec - Grayston Drive Branch 
Account Number 1100546992530 Business Top5 

Cash book balance at the begining of the year 
Cash book balance at the end of the year 

Bank statement balance at the begining of the year 
Bank statement balance at the end of the year 

12.2.6 Investec - Grayston Drive Branch 
Account Number 1100546992500 Business Tops 

Cash book balance at the begining of the year 
Cash book balance at the end of the year 

Bank statement barance at the begining of the year 
Bank statement balance at the end of the year 


2019 2018 

R R 


1,003,710 _ 1 

- 1 003 710 

1,003,710 _- 

1 003 710 


1,000,000 _ 1 

- _ 1 000 000 


1 , 000,000 _- 

1 000 000 


805,994 _ L 

805 994 


805,994 _ 1 

805 994 


16,111 _ 1 

- _ 16111 

16,111 _ 6 563 

16111 


2,078,498 _ 1 

2 078 498 


2,078,498 _- 

2 078 498 


5,051,264 


5,051,264 


ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTV) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


2019 2018 

R R 


12.2.7 First National Bank Account - Business Investment Desk Branch 
Account Number 62602914138 

Cash book balance at the begining of the year _ - 

Cash book balance at the end of the year _ 5,324,824 


Bank statement balance at the begining of the year _ I _ 

Bank statement balance at the end of the year _ 5,324,824 


12.2.8 First National Bank Account - Business Investment Desk Branch 
Account Number 62793930142 

Cash book balance at the begining of the year _ - 

Cash book balance at the end of the year _ 1,028,608 


Bank statement balance at the begining of the year _ - _- 

Bank statement ba lance at the end of the year 1,028,608 

Total Current Investments _11,404,696 _ 4 904 313 


CASH & CASH EQUIVALENTS 


20,229,373 5 110218 


13 RENTAL INCOME OF FACILITIES 


Bulwer Tunnels - 40 000 

Mathonsi Tunnels _ 84,348 _ 26 087 

84,348 66 087 


The rental income relates to the agreement in place between the Agency and Farley Farms (for the Mathonsi Tunnel). The 
agreement with Farley is in place from 1 November 2017 to 31 October 2020. 


14 INTEREST RECEIVED 


Bank 154,856 32 153 

Investments _ 664,981 _ 240,894 

_819,837 _273 047 


Interest from investments was derived from amounts invested with FNB and Investec Banks 


29 


370 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 

2019 

R 


15 GOVERNMENT GRANTS AND SUBSIDIES 


UNCONDITIONAL GRANTS 

Operational Ex IDM 21,667,932 

llembe District Municipality - LED Projects & Programmes 3,050,000 

llembe District Municipality - Tourism Programmes 1,950,000 

llembe District Municipality - Development of SMME's 3,980,000 

CONDITIONAL GRANTS 

King Shaka Tourism Route 

District Growth and Development Summit - COGTA 

COGTA Public Wi Fi Grant 856,246 

COGTA YEP Grant 125.531 

COGTA BIOMASS Grant 2,666,500 

COGTA RASET Grant 588,119 

SASA Grant 197,776 

UIF Grant 11,999,307 

Maphumulo I EC Project 697,500 

Total Government Grant and Subsidies 47,778,912 


15.1 Grant COGTA Public Wi Ft Grant 
Balance unspent at beginning of year 

Current year receipts 2,173,913 

Conditions met - transferred to revenue _ ( 856 246) 

Conditions still to be met-transferred to liabilities _1,317,667 


15.2 Grant COGTA Mini Factories Grant 
Balance unspent at beginning of year 

Current year receipts 2,173,913 

Conditions met - transferred to revenue _ 

Conditions still to be met-transferred to liabilities _2,173,913 


15.3 Grant ifembe District Municipality - LED 
Balance unspent at beginning of year 

Current year receipts 3,050,000 

Conditions met - transferred to revenue _ ( 3 050 OQQ) 

Conditions still to be met-transferred to liabilities - 


15.4 Grant llembe District Municipality - Tourism 
Balance unspent at beginning of year 

Current year receipts 1,950,000 

Transferred to revenue - no further cond.tions to be met _ ( 1 950 000) 

Conditions still to be met-transferred to liabilities 


15.5 COGTA YEP Grant 


Balance unspent at beginning of year 

Current year receipts 869,565 

Conditions met - transferred to revenue _ ( 125 531) 

Conditions still to be met-transferred to liabilities _744,034 


15,6 Grant COGTA BIOMASS Grant 
Balance unspent at beginning of year 

Current year receipts 4,347,826 

Conditions met - transferred to revenue _ ( 2 666 500) 

Conditions still to be met-transferred to liabilities _ 1,681,326 


2018 

R 


18 384 781 
3 582 999 
2 138 205 
500 000 

54 800 
168 631 


24 829 416 


199 999 
3 383 000 
( 3 582 999) 


501 254 
1 636 951 
(2 138 205) 


30 


371 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


2019 

R 


15.7 Grant COGTA RASET Grant 

Balance unspent at beginning of year 

Current year receipts 

Conditions met * transferred to revenue 

Conditions still to be met-transferred to liabilities 

15.8 Grant SASA 

Balance unspent at beginning of year 

Current year receipts 

Conditions met - transferred to revenue 

Conditions still to be met-transferred to liabilities 

15.9 Grant District Growth and Development Summit 2018 - COGTA 

Balance unspent at beginning of year 

Current year receipts 

Conditions met - transferred to revenue 

Conditions still to be met-transferred to liabilities 

15.10 Growth UIF Grant 

Balance unspent at beginning of year 

Current year receipts 

Conditions met - transferred to revenue 

Conditions still to be met-transferred to liabilities 

15.11 Development ofSMMEs 

Balance unspent at beginning of year 

Current year receipts 

Conditions met - transferred to revenue 

Current year receipts 

Conditions met - transferred to revenue 

Conditions still to be met-transferred to liabilities 

15.12 Maphumulo IEC Grant 

Current year receipts 

Conditions met - transferred to revenue 

Adjustments and Transfers 

Conditions still to be met-transferred to liabilities 


4,347,826 
( 588119) 
3,759,707 


220,000 
( 197 776) 
22,224 


131,369 


131,369 


15,670,812 
( 11 999 307) 
3,671,505 


3,980,000 
(3 980 000) 


700,000 
( 697 500) 
( 2 500) 


16 OTHER INCOME 


KwaDukuza Municipality 

206,450 

Wine sales 

64,169 

Insurance refunds 

121,625 

Afiica Ignite 

528,006 

Tourism KZN 

367,540 

Other income 

30,003 


1 317 794 




2018 

R 


300 000 
( 168 631) 
131 369 


500 000 
( 500 000) 


700 000 


700 000 


56,787 

47,778 


2,200 

106 764 


372 


ILEM8E MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 

2019 2018 

R R 


17 National Schools Nutrition Programme 
Supply of vegetables 


21.371,976 18 031 479 

21 371 976 18 031 479 


The Entity has a contract with the Department of Education (DOE) for the supply of vegetables to schools within iLembe District. 
DOE and the Entity signed a 3 year SLA commencing on 1 July 2017. In April 2019, the Entity was requested to supply Amasi to the 
schools up to June 2019. 

18 EMPLOYEE RELATED COSTS 


Employee related costs - salaries and wages 


13.692,941 

11 060 764 

Vineyard Wages 


1.156,211 

1 194 256 

Tunnel workers 


552,202 

288 400 

Pension contributions 


1,109,615 

253 680 

Medical aid 


665,418 

565 216 

UIF 


201.500 

48 723 

Leave pay 


484 : 985 

466 283 

Car and other allowances 

Included in the employee related costs are the following: 

— 

194.278 

18 057150 

479 376 
14 356 698 

Remuneration of the Chief Executive Officer 

CEO 


1.525,488 

1 442 396 

UIF 


1,785 

1 785 

Total 

_ 

1 527 272 

1444 181 

Remuneration of the Chief Financial Officer 

Annual Remuneration 


1.081,816 

990 389 

Car and Other Allowances 


42,100 

60 000 

Medical Aid 


43,956 

35 017 

Pension Fund 


186. M3 

43 632 

UIF 


1,785 

1 785 

Total 

= 

1 356 400 

1 130 822 

Remuneration of the Head: LED 

Annual Remuneration 


1,051,986 

730 606 

Car and other allowances 


58,704 

219 182 

Medical Aid 


31,985 

30 954 

Pension Fund 


91,465 

21 370 

UIF 


1./85 

1 785 

Total 

= 

1 235 923 

1 003 897 

Remuneration of the Manager: Tourism, Market and Communication 

Annual Remuneration 


954,405 

718 859 

Car and other allowances 


60,674 

172 944 

Medical Aid 


43,956 

38 435 

Pension Fund 


85,881 

24 850 

UIF 


1,785 

1 785 

Total 

_ 

1 146 701 

956 872 


19 REMUNERATION OF BOARD MEMBERS 


Remuneration includes a retainer and attendance fees at meetings: 


KS Shandu - Chairperson 

(Appointed November 2015) 

121,463 

109 423 

AT Nzama - Deputy Chairperson 

(Re-Appointed February 2017) 

90,437 

90 437 

D Nene - Finance & HR Chairperson 

(Appointed November 2017) 

93,437 

90 437 

JC Oelofse 

(Re-appointed February 2017) 

92.420 

77 420 

ZS Gumede 

(Appointed February 2017) 

95,420 

74 420 

N Mngadi 

(Appointed February 2017) 

77,420 

74 460 

B Mngadi 

(Appointed February 2018) 

89,420 

34 258 

Total Board Members' Remuneration 

660 017 

550 856 


$2 


373 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


2019 2018 

R R 


20 REPAIRS AND MAINTENANCE 


General Repairs 

Repairs and Maintenance tunnels and hubs 


21 CONTRACTED SERVICES 
Other Contracted Services 
Rental of premises 
Security 

Cleaning services 

Fuel and Oil 

Internal Audit 

Lease of Vehicles 

Leases- Office Equipment 

National Schools Nutrition Programme 

NSNP: Vegetables - Market 

NSNP: Fanners 

NSNP: Hub Workers 

NSNP: Amasi 

NSNP: Transportation of Vegetables 


22 GENERAL EXPENSES 

Included in general expenses is the fallowing: * 
Advertising 
External Audit Fees 
Subscriptions/LicencesJlnsurar m 
Bank Charges 

Entertainment/Refreshments 

Consulting and Professional Fees 

Board Expenses/Travel 

Purchase of Wine 

Tourism events and exhibitions 

Subsistence, Travel & Accommodation 

Conference and workshop 

Legal Fees 

Telephone and Fax 

Training 

Mechanization 

Development of SMMEs 

Interest and Penalties 

Postage, Courier & Delivery Services 

District Growth Development Summit 

Marketing, Communication & investments 

Printing and stationary 

Water and Electricity 

Audit Committee 

Winery Operations 

ICT Services 

Admin Costs/Consumables 
Projects Expenditure 
UIF Learner Stipends 
Uniforms 


313,755 

777,271 

V091 025 


2 556 618 



403,305 

666,588 

181,641 

54,015 

101,571 

4,941,970 

27,632 

39,338 

1,345,090 

1,387,801 

56,410 

286,659 

466,958 

6,322,968 

1,114,524 

853,066 

20,027 

6,565 

1,928,453 
114,059 
292,789 
105,000 
8,975 
113,245 
54,288 
4,759,529 
2,042,000 
36,974 
27 731 439 



260 

469 

1 

858 

662 

CM 

119 

131 

1 

844 

733 


135 

972 


428 

220 


74 

852 


251 

323 


133 

068 


772 

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48 

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391 

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23 UNAUTHORISED, IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE 

23.1 Fruitless and wasteful expenditure 
Reconciliation of fruitless and wastful expenditure 
Opening balances- 

Fruitless and wasteful expenditure current year 35,150 58 507 

Fruitless and wasteful expenditure written off _ ( 33 126) _ ( 58 507) 

Fruitless and wasteful expenditure not yet written off 2 025 


33 


374 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


2019 2018 

R R 


23,2 Irregular expenditure 

Reconciliation of irregular expenditure: 

Opening balance 

Awards to employees of the state current year 2 244 

Amount written off by Board _ 

Irregular expenditure not yet written off _ 2 244 


Awards to the suppliers in service of the state relate to transactions that occurred before the finalization of 2017/2018 audit, which the 
entity was liable to pay. 


27 665 

28 160 
( 55 825) 


23,3 Deviations 

Deviations were approved in terms of Section 34 of the Supply Chain 
Management Policy: 


Total Value 

5 909 837 

7 283 350 

Total Number of Cases 

6 

6 

CASH GENERATED/(UTILISED) BY OPERATIONS 

Surplus for the year 

1 871 603 

2 726 949 

Adjustment for: - 

Adjustments/Previous years operating transactions 

4 815 574 

5 997 520 

Depreciation, impairment & amortization 

2 107 851 

1 163 571 

Loss/(gain) on disposal of property, plant and equipment 

( 728 394) 

38 545 

Investment income 

( 819 837) 

( 273 047) 

Finance costs 

( 18 876) 

7 227 921 

. 

Operating surplus before working capital changes: 

9 653 538 

(Increase)/Decrease in inventories 

39 338 

( 104 753) 

(IncreaseVDecrease in receivables 

(3 158 753) 

( 680 276) 

(Decreaseyincrease in unspent conditional grants 

12 670 376 

73 116 

lncrease/(Decrease) in Payables 

8 226 295 

577 596 

Increase in VAT receivable 

(2 674 640) 

1 819 

Cash generated/(utilised) by operations 

22 330 537 

9 521 039 

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 

Current Investments 

11 404 696 

4 904 313 

Bank balances and cash 

8 824 677 

205 905 

Total cash and cash equiva'ents at the end of the year 

20 229 373 

5110 218 


34 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 

2019 2018 

R R 


26 GAINS AND LOSSES 


26.1 Disposal of Assets 

Loss on disposal 19,176 39 961 

Gain on disposal _-_ _ ( 16) 

(Gain) / Loss _19 175 _39 945 


26.2 Gain on fair valuing of assets ( 198 600) ( 1 400) 


26.3 Impairment Reversal ( 548 970) 


( 747 570) 


( 1400) 


27 ADDITIONAL DISCLOSURES IN TERMS OF MUNICIPAL FINANCE MANAGEMENT ACT 
27.1 Audit fees 


666 588 661 312 

( 666 588) ( 661 312) 


27.2 PAYE and UIF 


Current year audit fee 

Amount paid - current year 

Balance unpaid (included in creditors) 


Opening balance 
Current year payroll deductions 
Amount paid - current year 
Balance unpaid (included in creditors) 

27.3 Medical Aid Contributions 


249 025 

3 492 175 3 074 000 

(3 441 933) ( 2 824 975) 

299 268 _249 025 


Opening balance 
Current year payroll deductions 
Amount paid - current year 
Balance unpaid (included in creditors) 


93 067 
1 129 791 
( 1 161 296) 
61 562 


971 599 
( 878 532) 
93 067 


27.4 Pension Contributions 


Opening balance 
Current year payroll deductions 
Amount paid - current year 
Balance unpaid (included in creditors) 


1 689 553 376 520 

( 1 689 571) ( 376 520) 

_LJ2L _i. 


28 INCOME TAX 

No provision has been made for Income tax in the current financial year, the enterprise is in a tax loss position. Prior to considering 
current year tax implications; the enterprise t ad a brought forward assessed loss of R18 163 782. 


29 CORRECTION OF PRIOR PERIOD ERROR 
Effects on Statement of Financial Performance 

General Expenses 389 947 

These relate to expenses raised in the incorrect period (2018) but relating to 2019 

Contracted Sen/ices 49 683 

These relate to expenses raised in the incorrect period (2018) but relating to 2019 _ 

_ 439 630 

Effects on Statement of Financial Position 

Vat Receivables ( 162 134) 

Relates to prior period vat transactions that were incorrectly accounted for in June 2018 

Trade and Other Rer^ivabieii ( 11 975) 

Relates to prior period prepayment that was incorrectly accounted for in June 2018 

Cash & Cash Equivalents ( 275) 

Relates to petty cash transactions that were incorrectly accounted for in June 2018 

Trade and Other Payables { 1 568 309) 

Relates to prior period creditors that were incorrectly accounted for in June 2018 _ 

( 1 742 692) 

Effects on Statement of Net Assets (1 742 692) 


The above errors, which have been corrected in the financial statements as at 30 June 2019, relate to the transactions that were 
mixed up between the 2018 and 2019 financial years as a result of the system dosing and re-opening after transactions captured for 
2019 had already been processed. When 2018 was re-opened, the system recognized all 2019 transactions as part of 2018. 

3S 


376 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 

2019 2018 

R R 


30 EVENTS AFTER THE REPORTING DATE 

No events after the reporting date that could affect the presentation of the annual financial statements have been identified. 

31 RELATED PARTIES 

Parent Municipality: llembe District Municipality. 

IJembe District Municipality is the sole shareholder of the entity. 

Related party balances 

Amounts owing by/(to) i Lem be District Municipality: 


Opening Balance 

646,698 

526,779 

Movements during the year 

( 1 518 448) 

119,919 

Closing Balance 

This amount is included under payables 

(871.751) 

646,698 

Grant income received by Enterprise llembe: 

Administration Grant 

21 667 932 

18 384 781 

LED Grant 

3 050 000 

3 383 000 

Tourism Grant 

1 950 000 

1 636 951 

Raset Grant 

5 000 000 

. 

YEP Grant 

1 000 000 

- 

Biomass Grant 

5 000 000 

- 

Mini-Factories 

2 500 000 

- 

Public Wi-Fi 

2 500 000 

- 

District Growth & Development Summit 

- 

300 000 

Development of SMMEs 

3 980 000 

500 000 


46 647 932 

24204 732 


There were no other transactions in the current year, other than the ones fisted 
above. 

32 OPERATING LEASES 

The future minimum lease payments payable under operating leases for the actual liability are as follows: 

No later than 1 year 136 506 32 433 

Later than 1 year and no later than 5 years 250 261 

_386 767 32 433 


The entity entered into a lease agreement for machinery (contract for 5 printing machines) which is for the period 01 April 2019 to 31 
March 2022. 

33 TRANSFER OF AGRICULTURAL PROJECTS 

The process of transferring the following agricultural assets presently disclosed as PPE Agriculture and Biological Assets is currently 
underway. The entity is busy with the implementation of the ownership model. COGTA gave the entity a period of 36 months to 
complete the process 

Biodiesel 5 777 329 5 777 329 

North Coast Vineyards 590 000 391 400 

Agri Processing Facilities 10 751 476 10 107 236 

17 118 805 16 275 965 


34 GOING CONCERN 


The annual financial statements for the period ended 30 June 2019 have been prepared on a going concern basis. The agency does 
not forsee anything that will hinder it operating in the future. 




377 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
NOTES TO THE ANNUAL FINANCIAL STATEMENTS 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 

2019 2018 

R R 


35 RISK MANAGEMENT OF FINANCIAL ASSETS AND LIABILITIES 

35.1 Interest Rate Analysis 

The risk that the entity will not receive the maximum interest benefits from investments. 
Financial Assets: 


External Investments: 

Current investments 11,404.696 4,904.313 

Bank balances and cash _ 8,824,677 _ 205,905 

20,229,373 5,110,218 


Interest earned bank external investments 819,837 273,047 


Interest rate 4.1% 5.3% 


Outstanding Debtors: 

Other debtors _ 9,327,893 _ 6,233,253 

9,327,893 6,233,253 


Interest earned on outstanding debtors 

Interest rate ._ 0-0% 0-0% 


35.2 Credit Risk 

The risk that debtors will not pay the entity on time. 

Receivables: 

Other debtors _ 9,327,893 _ 6,233,253 

9,327,893 6,233,253 


1,169,873 
3,273,942 
1,672,841 
6,116,657 

35.3 Liquidity Risk 

The risk that the entity will not be able to settle its obligations when they are due. 


Ageing of consumer debtors 


Current 1,823.874 

31-60 days 6.847,552 

>60 days 656,467 

Net Consumer Debtors 9,327,893 


Equity (Net Assets) 


33,357,887 31,363,556 

........ I I I I u 


36 SUBSEQUENT EVENTS 

There have been no subsequent events from 1 July 2019 to the date of issuing of these financial statements, other than those 
disclosed herein. 


37 RESTATEMENT OF COMPARATIVE INFORMATION 
Statement of Financial Performance: 


Restated 

Comparative 


The items listed below have been reclassified within Property, Plant and Equipment from one class of assets to another in line with 
the updated Standard Charts of Accounts (SCOA) on the Asset Module in Munsoft. 


Municipal Buildings 

-Cost 397.401 

- Accumulated depreciation (66.407) 

Manufacturing Plant 

-Cost (1 475,098) 

- Accumulated depreciation 427,909 

Furniture and Equipment 

-Cost 1,077,697 

- Accumulated depreciation (361,503) 


a ? 


378 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 

SUPPLEMENTARY APPENDIX B: SEGMENTAL STATEMENT OF FINANCIAL PERFORMANCE 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 



379 




ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 

SUPPLEMENTARY APPENOIX A : SEGMENTAL ANALYSIS OF PROPERTY, PLANT AND EQUIPMENT 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 



380 



ILEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 

SUPPLEMENTARY APPENDIX C(1): ACTUAL VERSUS BUDGET (REVENUE AND EXPENDITURE) 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 


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382 



t LEM BE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 

SUPPLEMENTARY APPENDIX C(3>: ACTUAL VERSUS BUDGET (ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT) 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 





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383 



JLEMBE MANAGEMENT DEVELOPMENT ENTERPRISE (PTY) LTD 
SUPPLEMENTARY APPENDIX D : GRANTS AND SUBSIDIES RECEIVED * 2018/2019 
ANNUAL FINANCIAL STATEMENTS AS AT 30 JUNE 2019 



384 






The Municipal 

Manager 

ILembe House 
59/61 Mahatma 
Ghandi Street 
KwaDukuza 
4450 


The Municipal 

Manager 

P.O. Box 1788 

KwaDukuza 

4450 


385