Entire Document - Chris Hani District Municipality

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AUDIT REPORT FINDING: UNSPENT CONDITIONAL GRANTS AND RECEIPTS (ITEM 12 & 13) In the audit report for the year ended 30 June 2008, I reported that the balance of unspent grants was adjusted by journal entries totaling R18 million that were not supported by adequate and appropriate supporting documentation and for which no evidence of Council approval was provided. Management have not effected any adjustments to the corresponding figures as previously disclosed, and as a result, the corresponding figure for unspent grants is understated and corresponding figure for accumulated surplus is overstated by R18 million. AUDITOR GENERAL’S RECOMMENDED ACTION RESPONSIBLE DEPT / PERSON PROPOSED ACTION(S) TO BE TAKEN TARGET DATE PROGRESS REPORT Budget & Treasury Office • Chief Financial Officer • Deputy Chief Financial Officer Provide AG with Council decision / approval per item M 298 dated 19 February 2009 on unavailable documents supporting adjusting entries. 30-Mar-10 By management Done By Auditor General Outstanding • Deputy Chief Financial Officer Provide AG with a reconcilliation of the amount of R 128.1 million per Note 11 on the Statement of financial position to amounts disclosed in Note 20 on the Annuaul Financial Statements reporterd to be R 119 million by the AG. 30-Mar-10 Done Outstanding AUDIT REPORT FINDING: ACCUMULATED SURPLUS (ITEM 14 & 15) In the audit report for the year ended 30 June 2008, I reported that accumulated surplus was adjusted by journal entries totalling R24.2 million without adequate and appropriate supporting documentation. No adjustments have been processed or documentation provided to confirm that these journals were appropriate. As a result it was not possible to verify that the accumulated surplus at the end of the year under review and the corresponding figure contained all appropriate entries, was accurate and recorded at the correct amount. The corresponding figure of the accumulated surplus does not reconcile to the prior year audited financial statements and decreased by R4.8 million. This decrease is not supported by sufficient and appropriate supporting documentation. As a result it was not possible to confirm that the corresponding figure for the accumulated surplus was recorded at the correct amount. AUDITOR GENERAL’S RECOMMENDED ACTION RESPONSIBLE DEPT / PERSON PROPOSED ACTION(S) TO BE TAKEN TARGET DATE PROGRESS REPORT Budget & Treasury Office • Chief Financial Officer • Deputy Chief Financial Officer Provide AG with Council decision / approval per item M 298 dated 19 February 2009 on unavailable documents supporting adjusting entries. 30-Mar-10 By management Done By Auditor General Outstanding • Deputy Chief Financial Officer Give valid acceptable explanation to AG on items not covered by the Council decision on M 298 dated 19 February 2009 and explain restated amounts together with correction of errors on previous year’s figures. Outstanding AUDIT REPORT FINDING: EMPLOYEE RELATED COSTS (ITEM 16) The salaries paid to employees who are employed on the roads project are deducted from employee cost and included in project expenditure. As the employees are full time employees of the municipality and not employed on the project, employee costs are understated and project expenditure is overstated by R5.5 million. AUDITOR GENERAL’S RECOMMENDED ACTION RESPONSIBLE DEPT / PERSON PROPOSED ACTION(S) TO BE TAKEN TARGET DATE PROGRESS REPORT Budget & Treasury Office • Chief Financial Officer • Deputy Chief Financial Officer Adjust the relevant disclosure Note. 22 on the Annual Financial Statements 30-Jun-10 By management Outstanding By Auditor General Outstanding 212
AUDIT REPORT FINDING: IRREGULAR EXPENDITURE ITEM (17) Irregular expenditure of R 76.8 million is not disclosed in the financial statements. This irregular expenditure was a result of noncompliance with the supply chain management policy and irregular salary payments. AUDITOR GENERAL’S RECOMMENDED ACTION RESPONSIBLE DEPT / PERSON PROPOSED ACTION(S) TO BE TAKEN TARGET DATE PROGRESS REPORT Budget & Treasury Office • Chief Financial Officer Prepare a detailed schedule of the amounts making up the R 76.8 million reported by the AG by category. 30-Mar-10 By management Outstanding By Auditor General Outstanding • Supply Chain Manager Engage AG further to check if they have accepted information already submitted in relation to above and submit an item to Council for approval with explanation and motivation. 30-Mar-10 Outstanding Outstanding • Deputy Chief Financial Officer Ensure that proper and adequate disclosure is achieved. 30-Jun-10 Outstanding Outstanding AUDIT REPORT FINDING: FINANCIAL INSTRUMENTS (ITEM 18) The municipality did not comply with the provisions of the International Accounting Standards (IAS) 32 and 39 in respect of the disclosure, recognition and measurement of financial instruments. All applicable disclosures of IFRS 7 have not been made. Due to a lack of documentation it was not possible to assess the impact of this non-disclosure on the financial statements. AUDITOR GENERAL’S RECOMMENDED ACTION RESPONSIBLE DEPT / PERSON PROPOSED ACTION(S) TO BE TAKEN TARGET DATE PROGRESS REPORT Budget & Treasury Office • Chief Financial Officer • Deputy Chief Financial Officer Ensure that proper and adequate disclosure is achieved. 30-Jun-10 By management Outstanding By Auditor General Outstanding AUDIT REPORT FINDING: UNAUTHORISED EXPENDITURE (ITEM 19) Unauthorised expenditure of R3.8 million relating to overspending of a main division of the budget and expenditure that was not in accordance with the objective of the main division of the budget was omitted from the amount of R23 million unauthorised expenditure disclosed in Note 37.1 to the financial statements. AUDITOR GENERAL’S RECOMMENDED ACTION RESPONSIBLE DEPT / PERSON PROPOSED ACTION(S) TO BE TAKEN TARGET DATE PROGRESS REPORT Intergrated Planning & Economic Dev • Director IPED Prepare a detailed schedule of the amounts making up the B & B LED initiative component of the R 3.8 million reported by the AG by service provider and report the matter to Council for approval / condonation as required in terms of section 32 of the MFMA. 30-Mar-10 By management Outstanding By Auditor General Outstanding Budget & Treasury Office • Chief Financial Officer • Deputy Chief Financial Officer Prepare a report on the budget related component of the R 3.8 million reported by the AG and report the matter to Council for approval / condonation as required in terms of section 32 of the MFMA. 30-Apr-10 Outstanding Outstanding • Deputy Chief Financial Officer Ensure that proper and adequate disclosure is achieved. 30-Jun-10 Outstanding Outstanding 213
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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
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3.1 Introduction to the Annual Fina
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3.2 Audit Report to the Annual Fina
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APPENDIX A QUALITY MATURITY MODEL O
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3.4 MFMA - Requirements The audit r
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IRONPORT LICENSES STATUS BEFORE 200
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provide sufficient evidence to iden
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25. The mayor did not submit to cou
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No. Matter Y N •The audit committ
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Usefulness and reliability of repor
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The overall operating results for t
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5. ACCUMULATED SURPLUS The balance
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13. LONG-TERM RECEIVABLES Long-term
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3.8 STATEMENT OF FINANCIAL PERFORMA
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3.10 CASH FLOW STATEMENT FOR THE YE
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1.1 Changes in Accounting Policy an
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Management has considered all the o
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2.7 Heritage Assets Heritage assets
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The municipality did not perform im
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Based on management’s judgement,
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Cash includes cash-on-hand (includi
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5.5 Derecognition of Financial Asse
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7.3 Transitional Provisions The rec
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9.2.8 Sale of Goods Revenue from th
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of performance bonuses only when th
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amount of the Municipality’s net
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Changes in Accounting Estimates are
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2.1 Reconciliation of Provision for
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4.3 Cash and Cash Equivalents 2009
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Description Land and Buildings Infr
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The movement in Intangible Assets i
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Study Loans In terms of the MFMA no
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Unspent Conditional Grants have bee
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The municipality provides certain p
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The history of experienced adjustme
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2009 2008 R R Present Value of Fund
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Interest Earned on Financial Assets
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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
Page 189 and 190: • The statutory valuation perform
Page 191 and 192: 44. CONTINGENT ASSETS 2009 2008 R R
Page 193 and 194: Appendices 193
Page 195 and 196: 3.13 Appendices to the AnnuAl FinAn
Page 197 and 198: Cost / Revaluation Accumulated Depr
Page 199 and 200: Appendix c - seGmentAl AnAlYsis oF
Page 201 and 202: Description 2008/2009 Actual 2008/2
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Page 205 and 206: Annexure A Three Year Capital Plan
Page 207 and 208: Project Number (1) Project Name Fun
Page 209 and 210: Project Number (1) Project Name Fun
Page 211: AUDIT REPORT FINDING: PROPERTY, PLA
Page 215 and 216: Acronyms 215
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