Annual Report no. 8 July 2005

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Annual Report no. 8July 2005 June 2006
Ikangala Water
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Introduction

• IW appointed KPMG Inc for the year ended 30 June
  2006
• Independent auditors in terms of
• Section 188 of the constitution of RSA
• Section 4 and 28 of Public Audit Act (Act 25 of
  2004)
• Requirement of Water Services Act
• Requirement of PFMA
• Audited report presented

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Audit Report

• Non compliance by the Board
• IW did not have a system of internal audit as
  required by PFMA
• A risk management strategy and a fraud prevention
  plan as required by Treasury Regulations was not
  implemented
• IW did not submit its budget to the relevant
  treasury for approval as required by PFMA
• IW did not submit its 5yrs (2006-2010) business
  plan to the Minister of DWAF as required by WSA

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Overview

• Status of the Board ( 2 Board members)
• Management (No senior managers)
• Current staff (4 permanent employees)
• Current activities (billing of bulk supply)
• Income (subsidies from DWAF and payment from 1
  local municipality business)

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Water Produced

• Total water produced 33 376 824 Kl
• 13 981 063 Kl Bronkhorstspruit
• 19 395 761 Kl Weltevreden
• 1 234 320 Kl water loss (3.7)

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Water Sales
Volume (Kl) Amount (R)
Kungwini 1 865 080 4 215 081
Thembisile 13 633 174 30 810 973
Dr JS Moroka 13 039 118 29 468 407
Greater Marble Hall 493 687 1 115 733
Elias Motsoaledi 3 111 465 7 031 911
Total 32 142 504 72 642 105
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Income Statement
2006 2005 2004 2003
Water sold (Kl) 32 142 504 30 005 939 30 375 475 36 040 085
Revenues (R) 1 594 883 1 188 440 1 300 559 0
Operating Expenses 1 459 517 2 999 361 3 570 738 3 357 694
Operating Income 136 366 -1 810 921 -2 270 179 -3 357 694
DWAF Subsidies 0 2 550 000 2 000 000 2 000 000
Net surplus/ deficit 137 025 768 887 -226 572 -1 296 784
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Balance Sheet Breakdown
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Financial Indicators

• 7.1 growth rate in water sold
• 34.2 growth rate in revenue
• Lowest operating expenses
• Positive operating income
• Positive return for first time since
  establishment
• Profit of R137 025

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Financial Indicators

• No DWAF subsidies in 2005/6
• Reserve of R820 374
• Current assets R1 063 201
• No long term liabilities
• Current liabilities R307 547

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Strategic Objectives

• Being economically independent and financially
  viable
• Improve revenue collection
• Access to affordable and sustainable water
  services at acceptable levels
• Supporting municipal service delivery objectives

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Strategic Objectives

• Raising awareness of value of water, health,
  sanitation and the environment
• Commitment to economic empowerment of communities
• Develop pool of skills for socio-economic growth
• Partnership with private sector and other WBs

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Conclusion

• Appointment of more Board members
• Appoint senior managers
• Transfer of bulk infrastructure to IW with
  unlimited powers and budget
• Establish Board committees
• Finance (Internal audit/risk management/fraud
  prevention)
• HR
• Technical

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Conclusion

• Align 5 yrs business plan up to 2011 with
  municipal IDPs/WSDPs and Millennium goal on water
  and sanitation services
• Board to appraise its budget and submit for
  approval by end of April for 2007/2008
• Sign water services agreements with
  municipalities
• Self-sustained Board service delivery
• Efficient and effective service delivery will
  lead to a better life and contribute to local
  economic growth

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Thank You

• Questions?