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Setsoto Local Municipality

Setsoto Local Municipality. Presentation South African Parliament 19 September 2007. Structure of Presentation. Conditional Grants Budget Financial system Audit Outcome Loans Capital & Operational Expenditure Credibility. Structure of Presentation. Investments

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Setsoto Local Municipality

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  1. Setsoto Local Municipality Presentation South African Parliament 19 September 2007

  2. Structure of Presentation Conditional Grants Budget Financial system Audit Outcome Loans Capital & Operational Expenditure Credibility

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

  4. 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.

  5. CONDITIONAL GRANTS Funds received was mostly for bucket eradication All received funds will be spent by Oct/Nov 2007

  6. 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

  7. 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

  8. BUDGET 2007/2008 Problem Areas • Ward based is split: • Predominantly white area • Predominantly black areas

  9. BUDGET 2007/2008 Predominantly white area: Not attending budget meetings Only attend in final stage Submit comments only after council has approved the budget

  10. 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

  11. BUDGET 2007/2008Income

  12. 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

  13. BUDGET 2007/2008Expenses

  14. 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

  15. 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.

  16. 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

  17. Capital Expenditure

  18. Operational Expenses

  19. Personnel Expenditure % of expenditure

  20. Credibility of the budgetTotal Expenditure • 5/6 Depreciation • 6/7 Depreciation The change over the implementing the new GAMAP/GRAP reporting

  21. Credibility of the budgetSalaries

  22. Credibility of the budgetCapital

  23. Credibility of the budgetOperational

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

  25. 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

  26. Project Consolidate 2005-2007

  27. Project Consolidate 2005-2007

  28. DORA Expenditure 2004-2005

  29. DORA Expenditure 2005-2006

  30. DORA Expenditure 2006-2007

  31. Alignment of IDP and FSGDSKey Priority Areas

  32. 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

  33. 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

  34. 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

  35. 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

  36. 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

  37. Thank You

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