Setsoto%20Local%20Municipality

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Setsoto Local Municipality

• Presentation
• South African Parliament
• 19 September 2007

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Structure of Presentation

• Conditional Grants
• Budget
• Financial system
• Audit Outcome
• Loans
• Capital Operational Expenditure
• Credibility

4
Structure of Presentation

• Investments
• Project Consolidate- MSIG Expenditure 2005-2007
• Division of Revenue Grant 2004-2007
• Alignment of IDP and FSGDS
• Challenges Constraints

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CONDITIONAL GRANTS

• Received from National Treasury for financial
  year up to
• March 2007 R 31,926,064
• Spent R 31,926,064
• Received up to
• Aug 2007 R 73,137,424
• Spent to date 49,602,079
• Difference of R23m is on investment.

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CONDITIONAL GRANTS

• Funds received was mostly for bucket eradication
• All received funds will be spent by Oct/Nov 2007

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BUDGET 2007/2008

• Budget done according to Financial
  Regulations
• Budget process is interlinked with IDP process
  and runs concurrently but gives space for each
  other
• IDP process kicks off annually during Aug
• Followed by budget process in Sept

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BUDGET 2007/2008

• Process starts with departmental consultations
  and further refined by management
• Next level is the ward based planning
• Second week in Feb further refined by desk work
  and draft estimates
• Budget gets tabled to council during March
• Council approval during May

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BUDGET 2007/2008

• Problem Areas
• Ward based is split
• Predominantly white area
• Predominantly black areas

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BUDGET 2007/2008

• Predominantly white area
• Not attending budget meetings
• Only attend in final stage
• Submit comments only after council has approved
  the budget

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BUDGET 2007/2008

• EXPENSES
• Salaries allowances R 66,6 m
• General Expenses 60,1 m
• Repairs Maintenance 11,1 m
• Capital Charges
  15,9 m
• Contribution to capital 131,3
  m
• Contributions
  8,5 m
• Total Budget
  293,6 m

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BUDGET 2007/2008Income



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BUDGET 2007/2008

• INCOME
• Assessment rates 22,3
  m
• Grants donations 184,5
  m
• Levies
  59,8 m
• Other
  19,9 m
• Total
  286,7 m
• Charged out
  6,9 m

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BUDGET 2007/2008Expenses
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Financial Systems

• All debtors billing are done on a monthly basis
• Ledger done and reconciled monthly
• Bank reconciliation balances daily
• Financial system in use is called Finstel

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Audit Outcomes

• 2004-2005
• Qualification
• 2005- 2006
• Disclaimer
• Medium Capacity Municipality
• Legislation determined a change over to the
  GAMAP/GRAP set of accounts for 2006-2007
• Setsoto changed 2005-2006
• Disclaimers do not have different categories but
  outcome was based on technical points viz. Fair
  value, water stock etc.

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Loans

• Loans outstanding 2005/06
• R29,735,466
• Loans outstanding 2006/2007
• R25,585,024
• Repayment per annum R7,858,986
• Redemption R 4,150,441
• Short term portion R 5,954,233

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Capital Expenditure
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Operational Expenses
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Personnel Expenditure of expenditure
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Credibility of the budgetTotal Expenditure

• 5/6 Depreciation
• 6/7 Depreciation
• The change over the implementing the new
  GAMAP/GRAP reporting

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Credibility of the budgetSalaries
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Credibility of the budgetCapital
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Credibility of the budgetOperational
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Investments

• Short term investments held by
• Absa
• FNB
• Sanlam
• Total investments held R 5,809,579
• (R5,318,621)

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Relationship with various departments

• Excellent relationship
• Reports submitted on time
• Required information submitted timeously
• Departments give good financial assistance
• Receives technical support
• Plays a monitoring oversight role

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Project Consolidate 2005-2007
MSIG MSIG
Project Amount
Upgrading of billing system 200 000.00
Valuation 300 000.00
Social Survey 150 000.00
Rationalization of by-laws 84 000.00
Total received 734 000.00
Total expenditure 734 000.00
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Project Consolidate 2005-2007
MSIG MSIG
Project Amount
Upgrading of billing system 184 362.00
House to House IDP Needs Analysis 117 500.00
HR OHS 99 843.00
IDP Review 92 500.00
PMS 92 800.00
Document Management 219 298.25
Total expenditure 746 303.25
Allocation 734 000.00
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DORA Expenditure 2004-2005
Financial Management Grant Financial Management Grant
Detail Amount
Salary Costs ( Interns) 220 035.78
Gamap Reform (Financial Management) 593 265.21
Total Spent 2004-2005 813 300.99
Total Spent Prior Year 0.00
Total Expenditure 813 300.99
Total Grant Received 1 000 000.00
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DORA Expenditure 2005-2006
Financial Management Grant Financial Management Grant
Detail Amount
Salary Costs 208 054.40
Gamap Reform (Financial Management) 296 067.20
Total Spent 2005-2006 504 121.60
Total Spent Prior Year 813 300.99
Total Expenditure 1 317 422.59
Total Grant Received 1 000 000.00
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DORA Expenditure 2006-2007
Financial Management Grant Financial Management Grant
Detail Amount
Salary Costs 178 593.60
Gamap Reform (Financial Management) 119 322.19
Total Spent 2006-2007 297 915.75
Total Spent Prior Year 1 317 422.59
Total Expenditure 1 615 338.34
Total Grant Received 1 500 000.00
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Alignment of IDP and FSGDSKey Priority Areas
Setsoto IDP FSGDS
Infrastructure and Service delivery Social and Human Development
Institutional Development Efficient Governance and Administration
Social Development Social and Human Development Justice, Crime Prevention and Security
Local Economic Development Economic Growth, Development and Employment
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RISKCorporate Governance Interventions and
Principles of good corporate governance in terms
of MFMA and King II respectively

• A risk management officer was appointed and is
  undergoing training
• Anti-Fraud and Corruption Strategy
• Risk Management Framework
• Whistle Blowing Policy
• Minimum Information Security Standard Document

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RISK MANAGEMENT

• Supply management policy
• Bid specification committee
• Bid evaluation committee
• Bid adjudication Committee
• Asset management unit
• Demand management unit
• Internal Audit unit
• Audit com advertised

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Constraints

• Income drops annually from November to January
• Income drops before and after election
• No sustainable funding for MFMA implementation
• Full basic services not fully subsidized

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Constraints

• Fiscal constraints on implementing the Property
  Rates Act (R9m)
• Technical assistance not included in Equitable
  Share
• To eradicate all bucket an additional funding of
  R18 m is needed
• Bulk infrastructure capital R42m
• Loan application submitted to DBSA

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Constraints cont.

• Community in need of services
• Unable to supply services with inadequate
  personnel
• Budget not big enough to comply with national
  norms
• Organisational reform

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• Thank You