Entire Document - Chris Hani District Municipality

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3.12 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009 1. GENERAL INFORMATION Chris Hani District Municipality (the municipality) is a local government institution in Queenstown, Eastern Cape, and has 8 local municipalities under its jurisdiction. The addresses of its registered office and principal place of business are disclosed under “General Information” included in the Annual Financial Statements and in the introduction and overview of the Annual Report. The principal activities of the municipality are disclosed in the Annual Report and are prescribed by The Constitution. 2. Other Debtors 2009 2008 R R Payments made in Advance - 1 161 443 Government Subsidy Claims 17 608 012 14 538 143 Projects 1 380 364 680 232 Recoverable Works 146 486 146 834 Short-term Loans 19 101 652 25 459 001 Sundry Deposits 808 590 666 899 Sundry Debtors 7 422 639 11 308 514 46 467 743 53 961 067 Less: Provision for Impairment (22 072 312) (12 151 254) Total Other Debtors 24 395 431 41 809 813 Other Debtors have been restated to correctly classify amounts to be included in Creditors. Refer to Note 32.3 on “Correction of Error” for details of the restatement. The average credit period for Government Grants and Subsidies is dependent on the Government Department involved and the nature of the claim. No interest is charged on outstanding Government Grants and Subsidies. The subsidies are payable to the municipality due to allocations made in the DORA or based on agreements between the municipality and the relevant departments. Short-term Loans mainly comprise temporary advances made to local municipalities which are repayable within 12 months. Included in Sundry Deposits is an amount of R646 299 (2008: R646 299) in respect of cash deposits made to Eskom for the supply of electricity. Sundry Debtors are in respect of debits outstanding at year-end on normal business transactions entered into by the municipality. Included in the total is an amount of R1 628 419 (2008: R794 887) in respect of uncleared bank reconciliation items. 138
2.1 Reconciliation of Provision for Impairment 2009 2008 R R Balance at beginning of year 12 151 254 10 711 273 Impairment Losses recognised 13 573 358 1 439 981 Impairment Losses reversed - - Amounts written off as uncollectable (3 652 300) - Amounts recovered - - Balance at end of year 22 072 312 12 151 254 The Provision for Impairment was calculated after grouping all the financial assets of similar nature and risk ratings and assessing the recoverability. The Provision for Impairment on Other Debtors (loans and receivables) exists predominantly due to the possibility that these debts will not be recovered. Loans and receivables were assessed individually and grouped together at the Statement of Financial Position as financial assets with similar credit risk characteristics and collectively assessed for impairment. In determining the recoverability of a Debtor, the municipality considers any change in the credit quality of the Debtor from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the management believe that there is no further credit provision required in excess of the Provision for Impairment. The following loans and receivables are included in the total amount of the Provision for Impairment : 2009 2008 R R Government Subsidy Claims 7 956 900 - Recoverable Works 7 975 832 - Short-term Loans 4 775 788 12 151 254 Sundry Debtors 1 363 792 - Total Provision for Impairment on Other Debtors 22 072 312 12 151 254 3. VAT RECEIVABLE 2009 2008 R R Vat Receivable 8 181 691 6 493 750 Vat is payable on the receipts basis. Only once payment is reveived from debtors, VAT is paid over to SARS. No interest is payable to SARS if the VAT is paid over timeously, but interest for late payments is charged according to SARS policies. The municipality has financial risk policies in place to ensure that payments are affected before the due date. 139
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Table of Contents PART ONE: INTRODU
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PART ONE INTRODUCTION AND OVERVIEW
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providing us with your comments, vi
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SPECIAL PROGRAMMES SUCH AS YOUTH, W
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1.3.4 Values • Respect and Divers
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1.4 OVERVIEW OF THE MUNICIPALITY Mp
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SMME Development The District funde
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Corporate Services Directorate Ayan
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NAME OF SCHEME NUMBER OF MEMBERS AS
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organisation, can be seen to be inf
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2.1.4.5 Power Track Vehicle Managem
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2.2.0.1 Introduction A huge allocat
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In the 2008/2009 financial year Wat
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Integrated Planning and Economic De
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The implementation of housing co-or
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Livestock Improvement (Marketing Fa
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Chris Hani Month events Measurable
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Percentage Complete 99,9% Budget Sp
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Regional/LED Strategy Measurable Ou
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Health and Community Services Direc
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Due to the success of this project
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In observing HIV/AIDS days the CHDM
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Budget 2008/09 Key Deliverables •
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Challenges& Proposed Solutions Meas
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Budget Spent R125 000 Stakeholder/
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2.4.4 Disaster Management UNIT This
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critical areas. 2.4.4.5 INCIDENTS O
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2.4.5 Fire and Emergency Services U
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Stakeholders/partners Challenges Me
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2.5.0.1 Introduction For the financ
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Key Deliverables • Asset identifi
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• The possible rescheduling/timin
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Project leader T. Somtombo/ M. Mash
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Measurable outcome Activities/Proje
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72 Good Governance
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Communication strategy The District
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Stakeholders/partners Challenges Me
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2.6.2 INTERNAL AUDIT Services UNIT
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Challenges Measurable outcome Execu
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The SPU coordinating committee and
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We would like to highlight and comm
Page 87 and 88: 3.1 Introduction to the Annual Fina
Page 89 and 90: 3.2 Audit Report to the Annual Fina
Page 91 and 92: APPENDIX A QUALITY MATURITY MODEL O
Page 93 and 94: 3.4 MFMA - Requirements The audit r
Page 95 and 96: IRONPORT LICENSES STATUS BEFORE 200
Page 97 and 98: provide sufficient evidence to iden
Page 99 and 100: 25. The mayor did not submit to cou
Page 101 and 102: No. Matter Y N •The audit committ
Page 103 and 104: Usefulness and reliability of repor
Page 105 and 106: The overall operating results for t
Page 107 and 108: 5. ACCUMULATED SURPLUS The balance
Page 109 and 110: 13. LONG-TERM RECEIVABLES Long-term
Page 111 and 112: 3.8 STATEMENT OF FINANCIAL PERFORMA
Page 113 and 114: 3.10 CASH FLOW STATEMENT FOR THE YE
Page 115 and 116: 1.1 Changes in Accounting Policy an
Page 117 and 118: Management has considered all the o
Page 119 and 120: 2.7 Heritage Assets Heritage assets
Page 121 and 122: The municipality did not perform im
Page 123 and 124: Based on management’s judgement,
Page 125 and 126: Cash includes cash-on-hand (includi
Page 127 and 128: 5.5 Derecognition of Financial Asse
Page 129 and 130: 7.3 Transitional Provisions The rec
Page 131 and 132: 9.2.8 Sale of Goods Revenue from th
Page 133 and 134: of performance bonuses only when th
Page 135 and 136: amount of the Municipality’s net
Page 137: Changes in Accounting Estimates are
Page 141 and 142: 4.3 Cash and Cash Equivalents 2009
Page 143 and 144: Description Land and Buildings Infr
Page 145 and 146: The movement in Intangible Assets i
Page 147 and 148: Study Loans In terms of the MFMA no
Page 149 and 150: Unspent Conditional Grants have bee
Page 151 and 152: The municipality provides certain p
Page 153 and 154: The history of experienced adjustme
Page 155 and 156: 2009 2008 R R Present Value of Fund
Page 157 and 158: Interest Earned on Financial Assets
Page 159 and 160: The Financial Management Grant is p
Page 161 and 162: 20.11 Provincial: Office of the Pre
Page 163 and 164: 20.17 ProvinciaL: Department ROADS
Page 165 and 166: Remuneration of the Director: Finan
Page 167 and 168: 25. Impairment Losses 25.1 Impairme
Page 169 and 170: 29.1 Material Losses 2009 2008 R R
Page 171 and 172: Reserves Deferred Revenue Accumulat
Page 173 and 174: Operating Lease Liabilities R Accum
Page 175 and 176: The effect of the Correction of Err
Page 177 and 178: Incident Budgeted amounts exceeded:
Page 179 and 180: 38.7 Non-Compliance with Chapter 11
Page 181 and 182: 2009 2008 R R Own Resources - - 9 4
Page 183 and 184: The capital structure of the munici
Page 185 and 186: Description Note ref in AFS Average
Page 187 and 188: 2009 2008 R R Long-term Receivables
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• The statutory valuation perform
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44. CONTINGENT ASSETS 2009 2008 R R
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Appendices 193
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3.13 Appendices to the AnnuAl FinAn
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Cost / Revaluation Accumulated Depr
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Appendix c - seGmentAl AnAlYsis oF
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Description 2008/2009 Actual 2008/2
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203
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Annexure A Three Year Capital Plan
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Project Number (1) Project Name Fun
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Project Number (1) Project Name Fun
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AUDIT REPORT FINDING: PROPERTY, PLA
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AUDIT REPORT FINDING: IRREGULAR EXP
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Acronyms 215
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