annual report 2010 - 2011 - Intsika Yethu Municipality
annual report 2010 - 2011 - Intsika Yethu Municipality
annual report 2010 - 2011 - Intsika Yethu Municipality
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INTSIKA YETHU LOCAL MUNICIPALITY | ANNUAL REPORT <strong>2010</strong> - <strong>2011</strong>
Foreword by the Mayor<br />
The primary purpose of the Annual Report <strong>2010</strong>/<strong>2011</strong> is to provide an<br />
audited account of the performance of the <strong>Intsika</strong> <strong>Yethu</strong> Local <strong>Municipality</strong><br />
and the management of the budget. The Annual Report also<br />
provides a valuable opportunity to inform readers about the priorities and activities<br />
of the municipality, the progress it is making and the challenges it has to<br />
confront.<br />
On behalf of all the councillors I would like to express appreciation for the guidance<br />
and support provided by our management. In this regard strategic goals<br />
were informed by the objectives set out by previous year strategic planning. To<br />
attain these goals the municipality focused attention and resources on implementing<br />
the key priorities.<br />
As a level of the individual citizen, the priority is for the municipality to have<br />
processes, people and places that are efficient, responsive to people’s needs. This<br />
Annual Report provides a direct account of how far the municipality has achieved goals and the challenges that<br />
still need to be addressed.<br />
The municipality plays a key role in the management of bettering the lives of its communities which forms part<br />
of rest of the world. The Annual Report indicates how the municipality is responding to those serious challenges<br />
of service delivery. The Annual Report also focuses on the transformation of the <strong>Municipality</strong> as the organisation,<br />
its systems, and structure. The municipality has prioritised the improvement of the financial management and<br />
controls.<br />
Massive progress has been made in this and other areas, as indicated in the Annual Report. The senior management<br />
and staff have shown that it is capable of driving operations effectively and to respond strategically to challenges.<br />
In conclusion, I would like to thank the previous council for their contribution prior to their retirement.<br />
……………………<br />
K VIMBAYO<br />
HON MAYOR<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 3
FOREWORD BY THE<br />
MUNICIPAL MANAGER<br />
<strong>Intsika</strong> <strong>Yethu</strong> Local <strong>Municipality</strong> is one of the municipalities in the Chris<br />
Hani District <strong>Municipality</strong> whose function is the bettering lives of communities<br />
by provision of water and sanitation, construction of access roads<br />
and to generally bring service delivery to people. Despite the historical challenges<br />
posed by the vastness and the geographical terrain of the area as well as<br />
service delivery backlogs that are now systematically being attended, progress<br />
has been achieved in the year under review <strong>2010</strong>/<strong>2011</strong> compared to the previous<br />
year.<br />
The municipality has established solid relations with National and Provincial<br />
Departments of Public Works and Local Government who have assisted the<br />
municipality immensely in its efforts to change the lives of <strong>Intsika</strong> <strong>Yethu</strong> communities.<br />
<strong>Intsika</strong> <strong>Yethu</strong> Local <strong>Municipality</strong> is very conscious about what is expected<br />
of it in connection to service delivery issues and the improvement of the<br />
quality of the life of the communities and job creation.<br />
The municipality has focussed on areas of urgent need as identification of its service delivery plan (SDBIP) and<br />
<strong>report</strong>ed periodically in compliance with the relevant legislation. Whilst the municipality is mainly dependent on<br />
grants as the main source of funding, there has been concerted effort in improving revenue collection by the way<br />
being aggressive in revenue collection for service rendered by the municipality to those that are not indigent.<br />
As a result of the above efforts the municipality’s service delivery has improved tremendously and furthermore,<br />
through the EPWP programme, jobs have been created.<br />
Priority areas for the coming year would be to continue the intensification of the provision of services particularly<br />
water and sanitation and to improve on revenue collection and creation of jobs and job opportunities through local<br />
economic development within the municipality area.<br />
……………………<br />
Z SHASHA<br />
MUNICIPAL MANAGER<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 4
The Vision:<br />
“A people centred, developmentally focused rural local municipality in which all of its inhabitants have access to<br />
quality service delivery and participate in vibrant and well-balanced social and economic development”.<br />
The Mission:<br />
“Endeavours to advance its developmental local government mandate through a sustained focus onsound and accountable<br />
governance, physical and social infrastructure appropriate for sustainable development in our Municipal<br />
area”.<br />
Principles and Values of IYLM<br />
IYLM adopts the “Batho Pele Principles”, together with other underlying principles aligned to this value<br />
framework, which include the following: Democracy, as realised through consultation, transparency, and accountability;<br />
Respect & Courtesy; Responsiveness; Quality Services; Redress; and Value for Money.<br />
The IYLM in consultation with its local communities, as part of its Council and IDP representative processes,<br />
adopted the following set of values, in line with the above. These values are to guide how the <strong>Municipality</strong><br />
performs its mandate, as well as how it interacts with those who remain the owners of development (i.e. its<br />
inhabitants as the beneficiaries of development and service delivery).<br />
To be responsive to the needs of citizens and partner-local municipalities.<br />
To be transparent, accountable and participative in our dealings with each other and our partners.<br />
To cultivate a work ethic focused on performance, achievement and results.<br />
To promote and pursue key National, Provincial and local development goals.<br />
To ensure a representative organisation.<br />
To be democratic in the pursuance of our objectives.<br />
To show mutual respect, trust and ensure high levels of co-operation and discipline in our dealing with<br />
one another.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 5
Lokishini - C<br />
3<br />
Mtwaku - B<br />
Mtwaku - A<br />
Dayimani - D<br />
Lalini - L<br />
Esiqikini - A<br />
Dlakavu<br />
Matyeni - E<br />
Esigxeni<br />
Kuholi<br />
Dudumashe - C<br />
Nyongwana<br />
Kwandungwane - C<br />
Dudumashe - A<br />
Mbinzana<br />
Bilatye<br />
Tyelerha<br />
Maya - C<br />
Damane<br />
Lalini - K<br />
Ntlakwefolo<br />
Sihlabeni<br />
4<br />
Farmer - A<br />
Upper Lanti<br />
Sawulana - A<br />
Ngqanga<br />
Emkhukhwini<br />
Mtshingeni<br />
Kwantsinga<br />
Lubisi<br />
Cube - A<br />
Zwelitsha - cc<br />
Township<br />
2<br />
Mangweni - B<br />
Sabalele -A<br />
20<br />
Mthonjeni - F<br />
Tshatshu - BB<br />
Ngxwashu - A<br />
Bhukhwana<br />
Ndulini<br />
Kusabalele<br />
Bhencuthi<br />
Cungcwana<br />
Landport<br />
Qungu<br />
Lanti - A<br />
Kwagcina - A<br />
Eluqolweni - B<br />
Nyongwane - B<br />
Mgongxo - B<br />
Mgongxo - A<br />
Ngxwashu - B<br />
Nyamankulu<br />
Mmangweni - J<br />
Mdange<br />
Sidwadweni - B Zingquthu<br />
Matshona - A<br />
Ncambalala<br />
5<br />
Jokwe<br />
Cube - B<br />
Sdubi point Tafeni - A<br />
Camama Forest<br />
Ntshintshi<br />
Tafeni - B<br />
Canama<br />
Hoita<br />
Liqolo<br />
Hoyana<br />
Endwashini<br />
Dekes Hill<br />
Banzi - A<br />
Sentile<br />
Mphakathini<br />
Bomplas - B<br />
19<br />
Cambalala<br />
Magwala - B<br />
Mkobeni - A<br />
Mtimbini<br />
Tunzini - B<br />
Kwamnqanqeni Mqanqeni<br />
Magwala - D<br />
Jamani - A<br />
Maqwatini - A<br />
Khayamandi - B<br />
Emkobeni<br />
Ngxingweni - A<br />
Khayamandi - A<br />
Wodehouse<br />
Magwala<br />
Diphini - D<br />
Magwala - A<br />
Qolweni - A<br />
Maqwathini - C Mtingwevu<br />
15<br />
Tyhawana<br />
1<br />
Nququ<br />
Hoyana<br />
Chamama - B<br />
Kwandlangisa<br />
Exeni - B<br />
Nquqhu - B<br />
Cofimvaba<br />
14<br />
Hala - BB<br />
Gcina - K<br />
21<br />
Ngxabangu<br />
16<br />
Tshamazimba<br />
Nonqonqwama<br />
Dipini - A<br />
Chris Hani<br />
Mlenze<br />
Sikhobeni - A<br />
Mahlubini - E<br />
Kwanyoka<br />
Mtingwevu - C<br />
Mtingwevu Mission<br />
Nquqhu - A<br />
Bolana - B<br />
Bolana - A<br />
Kwandungwane - D<br />
Mtshanyana - A Mtshanyana - B<br />
Sijula<br />
Mahlubini - B<br />
Kwandungwane - E<br />
Mpunga<br />
Taiwan<br />
Mahlatini - A<br />
7<br />
Qutse<br />
Qutsa<br />
Nxelesa<br />
Qolweni - B<br />
Mtyangwe<br />
Lower Qutsa<br />
Qombolo - G<br />
Mdeni - AC<br />
Banti<br />
Komkhulu - O<br />
Endensa<br />
Ntsela<br />
Mbulu<br />
Gongqo<br />
Ngcacha<br />
Ntlakwevenkile<br />
Mbojweni<br />
Maxambeni<br />
Mission - G<br />
Entlini<br />
Ncwane<br />
Kwebulana<br />
Mission - F<br />
Mankane<br />
Ajoliwe<br />
Ngudle<br />
Jojweni - N<br />
Qwili<br />
Nqumakala Nomadamba<br />
Kwamzola<br />
Kwangali<br />
Ngceza - A<br />
Gxwalibomvu - A<br />
Elwalweni<br />
Endenxa - A<br />
Lujilo - A<br />
Mbulu<br />
Ncora Irrigation<br />
Gasini - A<br />
Nomadambe<br />
Gesini<br />
Kwachotha<br />
Kwazulu - A<br />
Cubeni<br />
Qombolo - B<br />
Mafengwini<br />
Eluqolweni - BB<br />
13<br />
Ngceza - B Qombolo - E<br />
Khwebulana - A<br />
Qombolo - H<br />
Mxobozweni<br />
Komkhulu - P<br />
Qombolo - F<br />
Kwahange<br />
Mantanjeni - A<br />
Gwadela<br />
Xeni - A<br />
Mtsheko - A<br />
Kwamlondleni - B<br />
Kwamlondleni - A<br />
Esikolweni - A<br />
Mahlungulu - A<br />
Mvumelwano - A<br />
Mdeni - R<br />
Galali - A<br />
18<br />
Malangwane<br />
Mkuthukeni<br />
Khwebulana - B<br />
Ncora School<br />
Mahlungulu - C<br />
Mdeni/ezantsi<br />
Gushed<br />
Emrhotshozweni<br />
Luthuli<br />
Lutuli<br />
Kwadukatole Goloza<br />
Komkhulu - RR Mbulukhweza - A<br />
6<br />
Mbulukhweza - B<br />
Komkhulu - T<br />
Mbulukweza<br />
8<br />
Willow - B<br />
Mbulu mission<br />
Hange - B<br />
Lower Ncora<br />
10<br />
Kwalumandi<br />
Mgwenyana<br />
Gcingca<br />
Jojweni - S<br />
Kwa Mbaxa<br />
Gcibhala - B<br />
Lahlangubo - D<br />
Mtshabe<br />
Mission - H<br />
Lurshabeni<br />
Matafeni - B<br />
Mhlahlane - F<br />
Mkhwinti<br />
Ebusini<br />
Mission - C<br />
Home<br />
Luqoleneni<br />
Ezantsi - C<br />
Mdeni - T<br />
Eqolweni - A<br />
Zawukana<br />
Khalana<br />
Mdunjeni Marhawuleni<br />
Ngdumenya<br />
Longqayi<br />
Matafeni - A<br />
Bhotani - B<br />
Melika<br />
Gasini - B<br />
Mhlahlane - E<br />
Sobotini<br />
Tsomo<br />
Esigangeni - A<br />
Pesikeni<br />
Mgqwazini<br />
Ntsongeni - A<br />
Fraser's Garage<br />
Jara - A<br />
Tshayelela<br />
Bololitye Store<br />
Luqolweni - D<br />
Gugwini - B<br />
Ngxongweni - A<br />
Ngcongcolorha - A<br />
Ngcongcolorha - B<br />
Ndenxe - A<br />
Mgababa - A<br />
Luqolweni - F<br />
Ngingqini - A<br />
Jerusalem - A<br />
17<br />
Kwazulu - B<br />
Ngwemnyama - G<br />
Komkhulu - Q<br />
Mbombela<br />
Daza<br />
Bhotani - A<br />
Nobhokhwe - A<br />
Mahlubini - D Mahlubini - C<br />
Majwareni - B<br />
Nyhebe<br />
Nobhokhwe - B<br />
Mangobonlu Mahlubini - A<br />
Emahlubini - A<br />
East Bank<br />
Tenza - B<br />
Zolo<br />
Nongqothi<br />
Matolanyile - A<br />
Matolanyile - B<br />
12<br />
Nobokwe - B<br />
Vrystad<br />
Ngqwaru<br />
Kwamaduma<br />
Chifini<br />
Makhwababa<br />
Besi<br />
Komkhulu - M<br />
Ngojini - I<br />
Mdeni - V<br />
Mabhentseni<br />
Kwandungwana - A<br />
Tshatshu - C<br />
Layitini<br />
11<br />
Halalani<br />
Mdibaniso<br />
Sixhotyeni - A<br />
Ezidulini<br />
Qitsi<br />
Eqitsi<br />
Ndlunkulu - A<br />
Ndwashini<br />
Magqoleni<br />
Sodom<br />
Ncatsheni<br />
Qwebeqwebe<br />
Main<br />
Mkhwezweni -B<br />
9<br />
Jwqyi<br />
Emandlaneni<br />
Nyathi - A<br />
Ngwevana - C<br />
Kwandaba<br />
Xonya - B<br />
Cwecweni - A<br />
Matyabomvu<br />
Etoleni<br />
Magezimeni<br />
Nxamalele - A<br />
1<br />
Nxamalele Store<br />
Chaba - D<br />
Nxamalele - B<br />
Eluxeni - C<br />
Manuneni<br />
Mziwini<br />
2<br />
Emmangweni -A<br />
Chaba - E<br />
Emaqakamzini<br />
Emaqomeni - B<br />
Elalini - C<br />
Mqonci - A<br />
Sikhobeni - B<br />
Kuchaba<br />
Libiza<br />
Mqonu<br />
Nqutura<br />
Esikobeni - B<br />
Makhambi<br />
Sgubudwini<br />
Nabileyo - B<br />
Emazizini - A<br />
Khethi - A<br />
Nabileyo - A<br />
Kofu<br />
Lalini - AA<br />
Engasa<br />
Khethi - B<br />
Kwasofika<br />
Esiqikini - b<br />
Ntshingeni - A<br />
Manxiweni - C<br />
Emqonci<br />
Komkhulu - CA<br />
Mqonci - B<br />
Zundwana<br />
Kuntonga<br />
Overview of the Report<br />
The Annual Report <strong>2010</strong>/<strong>2011</strong> aims to convey to the reader what the municipality has<br />
achieved during the financial year of <strong>2010</strong>/<strong>2011</strong>. Drawing the municipal strategic plan, its<br />
highlights both the achievements as well as the challenges facing the Municipal Departments<br />
during the <strong>report</strong>ing period. In order to meet the requirements set by the Easter Cape<br />
Treasury Department, the Annual Report is structured into four main parts.<br />
Part 1<br />
General information<br />
• Introduction and Overview<br />
• Foreword by the Mayor<br />
• Foreword by the Municipal Manager<br />
• Executive Summary<br />
Part 2<br />
Key Performance Achievement Reports<br />
Part 3<br />
Audited Statements and other financial information<br />
Part 4<br />
Good Governance<br />
CHRIS HANI DISTRICT MUNICIPALITY (DC 13)<br />
Eastern Cape Province<br />
<strong>Intsika</strong> <strong>Yethu</strong> Local <strong>Municipality</strong><br />
<strong>Intsika</strong> <strong>Yethu</strong><br />
Contact Details<br />
Joseph Jankie<br />
Tel : 045 808 4742<br />
Fax : 045 838 5959<br />
Email : jjankie@chrishanidm.co.za<br />
Disclaimer<br />
Chris Hani District <strong>Municipality</strong> in no way accepts resposibility for<br />
the accuracy or completeness of the data presented on this map,<br />
and will not be held liable for damages, including loss of profits or<br />
consequential damage, arising out of the use of this information.<br />
.<br />
Produced by : CHDM GIS Unit<br />
Projection : Transverse Mercator<br />
Sphere :<br />
Datum : WGS84<br />
File Name : Water Service Delivery<br />
File Path : C:/GISDB/Water Service Delivery<br />
Revision No. : 3<br />
Scale1:130 000<br />
Date : 22 April 2008<br />
0 4.5 9 18 27 36<br />
Kilometers<br />
Legend<br />
Road Network<br />
National Road<br />
Ward Boundaries<br />
New LM Boundary<br />
Settlements<br />
Old LM Boundary<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 6
EXECUTIVE SUMMARY<br />
The population of <strong>Intsika</strong> <strong>Yethu</strong> is estimated to be 194 246 people living in 44 768<br />
households. This population size also implies that 22% of the Chris Hani district<br />
population resides in <strong>Intsika</strong> <strong>Yethu</strong>. The average household size in the municipality<br />
is 4 people per household.<br />
There are still major challenges ahead given that over two thirds (76%) of the population<br />
is indigent with unemployment estimated over 50%. About 53% of our population is<br />
females while males account for only 47%.<br />
About 60% of our population is children in the school going age group (0-19 years).<br />
About 7% falls within the pension age group. Only 33% are in working age group (20<br />
– 64 years). This means that there is a high dependency ratio as 67 % of the population<br />
depends on the 33% workforce in the area.<br />
OVERVIEW OF THE<br />
MUNICIPALITY<br />
<strong>Intsika</strong> <strong>Yethu</strong> Local <strong>Municipality</strong> is a democratic elected category B municipality made up of<br />
the representative councilors and administration staff. It is one of the eight local municipalities<br />
found within the Chris Hani District <strong>Municipality</strong>. The municipality is purely rural with a<br />
population of about 194 000. <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> practices its duties through its communities<br />
from all 21 wards. The councilors of <strong>Intsika</strong> <strong>Yethu</strong> Local <strong>Municipality</strong> form part of the local<br />
allocated government working directly with the local people. The municipality excises its duties<br />
through its constituent communities. Under the municipality’s jurisdiction is:<br />
• Cofimvaba<br />
• Tsomo<br />
Unemployment and poverty affects a large number of people within the municipal areas. The<br />
council forms part of the local sphere of government, closely located to the people. The <strong>Intsika</strong><br />
<strong>Yethu</strong> Local <strong>Municipality</strong> exercises its duties and functions through its constituent areas.<br />
Africans represent the largest population group in the Municipal area. Mini farming is the biggest<br />
source of livelihood in the area. The area of <strong>Intsika</strong> <strong>Yethu</strong> offer a diverse range of opportunities<br />
in industries linked to agriculture and other industries.<br />
Key features of the Local Economy<br />
-<br />
-<br />
Farming: grain, poultry and dried fruit<br />
Growing tourism sector<br />
Livestock improvement Tourism has been added to the economic base of <strong>Intsika</strong> <strong>Yethu</strong>. Slowly the<br />
<strong>Municipality</strong> is becoming more noticeable on tourism maps due to its rich history and culture.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 7
MEMBERS OF EXECUTIVE<br />
COMMITTEE<br />
Hon Mayor: Councilor K Vimbayo<br />
SPU Portfolio Head: Councillor N Stata<br />
Local Economic Development and Planning: Councillor William Mdwayingana<br />
Infrastructure Development and Planning: Councillor Myathaza<br />
Community Services Department: Councillor N A Tshangana – Nkota<br />
Corporate Services Department: Councillor N Ntsaluba<br />
Water Services: Councillor K Mdleleni<br />
Six managers of departments<br />
•<br />
•<br />
•<br />
•<br />
•<br />
•<br />
Municipal Manager: Mr Z Shasha<br />
LED: Mr K Maceba<br />
Infrastructure Plan & Dev: Mr S Koyo<br />
Community Services: Ms Y Mniki<br />
Corporate Services: Ms Nkuhlu<br />
Budget and Treasury: Mr M Dyushu<br />
Portfolio Head:<br />
Water n Sanitation:<br />
Cllr K Mdleleni<br />
Portfolio Head:<br />
Corporate Services:<br />
Cllr N Ntsaluba<br />
Portfolio Head:<br />
Special Programmes<br />
Unit: Cllr N Stata<br />
Portfolio Head:<br />
Infrastructure & Planning:<br />
Cllr S Myataza<br />
Portfolio Head:<br />
Budget & Treasury:<br />
Cllr J Cengani<br />
Portfolio Head for Local Economic<br />
Development and Planning:<br />
Cllr W Mdwayingana<br />
Portfolio Head for<br />
Community Services:<br />
Cllr N Tshangana – Nkota<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 8
CHAPTER ONE<br />
Human resource and other organization management – KPA 1<br />
Human Resources and Other Organisation Management<br />
• Total number of approved posts; 193<br />
• The total number of vacant posts in the entire institution: 12<br />
• Six Performance Agreements were submitted.<br />
1.2 Staff development initiatives during the Financial Year<br />
See attached list.<br />
1.3 Key HR statistics per functional area<br />
1.<br />
a.<br />
Full time staff complement per functional area (examples are given below)<br />
MM/Section 57 and Line Managers<br />
Approved positions (e.g. MM – S57 etc…)<br />
Number of approved and<br />
budgeted posts per position<br />
Filled posts<br />
Vacant posts<br />
1 Municipal Manager’s Office 10 09 01<br />
2 Corporate Services Department 29 26 01<br />
3 Budget and Treasury Department 29 25 04<br />
4 Community Services Department 83 77 6<br />
5 LED and Planning Department 9 9 -<br />
6 Technical Services Department 46 40 06<br />
2.<br />
Technical staff registered with professional bodies<br />
Technical<br />
Service: Water<br />
Services<br />
Total number of<br />
technical service<br />
managers<br />
Total number<br />
pending registration<br />
in the accredited<br />
professional body<br />
Total number pending<br />
registration confirmation<br />
in the accredited<br />
professional body<br />
5 4 1 -<br />
Total number not<br />
yet registered in<br />
the accredited<br />
professional body<br />
3.<br />
Level of education and skills<br />
Total number of Staff<br />
Number of staff without<br />
Grade 12<br />
Number of staff with<br />
Senior Certificate only<br />
Number of staff with Tertiary/<br />
accredited professional training<br />
207 93 30 80<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 10
4.<br />
Trends on total personnel expenditure<br />
Financial Years<br />
Total number of staff<br />
Total approved<br />
operating Budget<br />
2006-2007<br />
2007-2008 50 550 663 30 097 425<br />
2008-2009 63 840 937 34 097 695<br />
2009-<strong>2010</strong> 118 891 631 42 486 563<br />
Personnel expenditure<br />
(salary and salary<br />
related)<br />
Percentage of<br />
expenditure<br />
5.<br />
List of pension and medical aids to whom employees belong (please add if necessary)<br />
Names of pension fund<br />
Number of<br />
members<br />
Names of medical Aids<br />
Number of members<br />
Cape Joint 159 Bonitas 85<br />
Samwu Provident Fund 10 Discovery LA Health 16<br />
Eastern Cape Group Scheme 5 Samwu Med. 21<br />
Hosmed 8<br />
1.4 Senior officials’ wages and benefits;<br />
Municipal Manager: R 745 253<br />
Managers <strong>report</strong>ing directly to the Municipal Manager: R 670 892<br />
1.5 Implementation of the Performance Management System (PMS):<br />
Both individual and institutional PMS are fully implemented, individual at the level of senior managers only.<br />
1.6 Annual performance as per key performance indicators in municipal transformation and organizational<br />
development<br />
Indicator Name<br />
Total number of<br />
people (planned for<br />
) during the year<br />
under review<br />
Achievement<br />
level during the<br />
year under review<br />
Achievement<br />
percentage during<br />
the year<br />
1<br />
Vacancy rate for all<br />
approved and budgeted<br />
posts;<br />
2<br />
3<br />
Percentage of appointment<br />
in strategic<br />
positions (Municipal<br />
Manager and Section 57<br />
Managers)<br />
Percentage of Section<br />
57 Managers including<br />
Municipal Managers<br />
who attended at least 1<br />
skill development training<br />
course within the FY<br />
6 6 100%<br />
6 6 100%<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 11
4<br />
5<br />
6.<br />
7<br />
10<br />
11<br />
12<br />
Indicator Name<br />
Percentage of Managers<br />
in Technical Services<br />
with a professional<br />
qualification<br />
Percentage of municipalities<br />
within the<br />
district area that have a<br />
fully functional Performance<br />
Management<br />
System (DM only)<br />
Percentage of staff that<br />
have undergone a skills<br />
audit (including competency<br />
profiles) within the<br />
current 5 years term<br />
Percentage of councilors<br />
who attended a skill<br />
development training<br />
within the current 5 year<br />
term<br />
Percentage of staff<br />
complement with disability<br />
Percentage of female<br />
employees<br />
Percentage of employees<br />
that are aged 35 or<br />
younger<br />
Total number of<br />
people (planned for<br />
) during the year<br />
under review<br />
Achievement<br />
level during the<br />
year under review<br />
1 1 100%<br />
46 46 100%<br />
207 2 3,9%<br />
207 80 41%<br />
207 89 46%<br />
Achievement<br />
percentage during<br />
the year<br />
<strong>Intsika</strong> <strong>Yethu</strong> Local <strong>Municipality</strong> won the Most Improved Work Place award in <strong>2010</strong>. The awards were provincial LGSITA<br />
Awards which were held in East London. The award means that the municipality is keen on skills development and that will<br />
have a good impact on issues of service delivery. The award was comprised of a trophy and R15 000 check.<br />
CHALLENGES<br />
• Training & Development Policies<br />
• Records Management and lack of space for registry function<br />
REMEDIAL ACTIONS<br />
• Two training & development policies have been developed.<br />
• Workshops on record management have been attended by key officials<br />
• Filing cabinets have been purchased though we have space challenges<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 12
Chapter TWO<br />
Basic Service delivery performance highlights – KPA 2<br />
Annual performance as per key performance indicators in Electricity services<br />
Indicator name<br />
Total number of household/customer<br />
expected to<br />
benefit<br />
Estimated backlogs (actual<br />
numbers)<br />
1<br />
Percentage of households with access<br />
to electricity services<br />
14 304 35 128<br />
2<br />
4<br />
Percentage of indigent households<br />
with access to basic electricity services<br />
Percentage of indigent households<br />
with access to free alternative energy<br />
sources<br />
3879 71.7<br />
6113<br />
The major challenges are<br />
• Resource constraints<br />
• Skills shortage<br />
• Escalating costs<br />
• Way-leave problems<br />
• Settlement densities<br />
• Ground conditions<br />
• Contractual challenges (contractors)<br />
• Inadequate funding<br />
• Economic condition impact<br />
• Non-standard material<br />
These problem can be address by training youth on the skills that are needed.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 14
Road maintenance<br />
The municipality is responsible for the construction, maintenance and upgrading of local access roads and stormwater<br />
infrastructure. The DR (district roads) are under the Chris Hani District <strong>Municipality</strong> and there is an R61<br />
road which is under SANRAL.<br />
Level and standards in road maintenance services<br />
The entire road network of mainly gravel roads is generally in poor condition and in need of upgrading and maintenance.<br />
There is a target of 70 km of roads to be maintained of which 45% is done. Of the tarred roads length<br />
about 7 km are urban access roads running within towns of Cofimvaba and Tsomo. The most of these access<br />
roads need the construction of bridges and storm water.<br />
Annual performance as per key performance indicators in road maintenance services<br />
1<br />
2<br />
4<br />
5<br />
Indicator name<br />
Percentage of households without<br />
access to gravel or graded roads<br />
Percentage of road infrastructure<br />
requiring upgrade<br />
Percentage of planned new road<br />
infrastructure actually constructed<br />
Percentage of capital budget reserved<br />
for road upgrading and maintenance<br />
effectively used.<br />
Total number of<br />
household/customer<br />
expected to benefit<br />
60<br />
70 60<br />
30<br />
Estimated backlogs (actual<br />
numbers)<br />
Major challenges in road maintenance services and remedial actions<br />
Bridges are the major challenge in the access roads. However lack of funding for maintenance tended to<br />
determine the gains and work done in this area as most gravel roads have fallen victim to terrestrial rains.<br />
Waste management<br />
Waste management services delivery strategy and main role-players<br />
The <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> employs a two pronged approach in terms of waste management by promoting<br />
cleanliness as well as alleviation of poverty. The street cleaning is done by casual workers recruited from<br />
the different wards on a three month rotational basis. This project is funded through the Extended Public<br />
Works Programme. Awareness campaigns are conducted <strong>annual</strong>ly at both units (Tsomo & Cofimvaba).<br />
Households within the CBD have been supplied with industrial wheelie bins and 200 litre bin liners. Waste<br />
collection is done once a week per area and the densely populated areas have also been supplied with skip bins<br />
and steel bins which are collected once a week.<br />
The municipality has a partnership with Buyisa e bag which has supplied bailing machines for both the transfer<br />
and landfill sites. Waste is sorted at the site by sorters trained by Buyisa e bag and other sorters have been<br />
deployed at Boxer supermarkets to sort at the source. This is done to minimise waste that goes to the cell.<br />
The Department of Economic Development and Environmental Affairs is supporting the municipality also<br />
in terms of forming a Waste Management Co-operative.<br />
The Integrated Waste Management Plan (IWMP) is being reviewed as circumstances have changed since 2005<br />
when it was drafted. The IWMP is drafted by the District <strong>Municipality</strong> in consultation with local municipalities<br />
and is therefore adopted at the District and implemented by the local municipalities. Implementation is done<br />
as follows:<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 15
• Implementation of current legislation<br />
• Implementation of waste minimisation strategies e.g. sorting of waste at source and site<br />
• Compliance with DWAF landfill requirementsWaste disposal processes<br />
• Waste collection & transportation<br />
• Waste disposal<br />
• Sorting<br />
• Public private partnerships (Injabulo <strong>Yethu</strong> & Buyisa e-bag)<br />
• Waste volumes recording<br />
1.<br />
Community and social services function’s performance<br />
Function: Community and Social Services<br />
Sub Function: All inclusive<br />
Reporting Level Detail Total<br />
Overview:<br />
Includes all activities associated with the provision of<br />
community and social services<br />
Description of the<br />
Activity:<br />
The function of provision of various community and<br />
social services within the municipality is administered<br />
as follows and includes:<br />
<br />
These services extend to include , but<br />
do not take account of which resides<br />
within the jurisdiction of government. The municipality has a<br />
mandate to:<br />
<br />
The strategic objectives of this function are to:<br />
<br />
The key issues for 200X/0Y are:<br />
<br />
Analysis of the<br />
Function:<br />
<br />
1 Nature and extent of facilities provided:<br />
no of facilities:<br />
no of users:<br />
- Library services 01 1000<br />
- Museums and art galleries 0 <br />
- Other community halls/facilities 15 3000<br />
- Cemeteries and crematoriums 02 5000<br />
- Child care (including crèches etc) 03 500<br />
- Aged care (including aged homes, home help) 01 100<br />
- Schools <br />
- Sporting facilities (specify) 03 2500<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 16
Reporting Level Detail Total<br />
- Parks 0 <br />
Note: the facilities figure should agree with the assets<br />
register<br />
2<br />
Number and cost to employer of all personnel associated<br />
with each community services function:<br />
R(000s)<br />
- Library services <br />
- Museums and art galleries <br />
- Other community halls/facilities <br />
- Cemeteries and crematoriums 03 R160 000.00<br />
- Child care <br />
- Aged care <br />
- Schools <br />
- Sporting facilities <br />
- Parks <br />
Note: total number to be calculated on full-time<br />
equivalent (FTE) basis, total cost to include total salary<br />
package<br />
6<br />
Total operating cost of community and social services<br />
function<br />
R (000s)<br />
Key Performance<br />
Area<br />
Performance During the Year, Performance Targets<br />
Against Actual Achieved and Plans to Improve<br />
Performance<br />
Current<br />
Target<br />
• Approved HIV/<br />
AIDS strategy;<br />
• Approved Disaster<br />
management policy<br />
frameworks and<br />
plans (Metro and<br />
DM)<br />
< List here the actual performance achieved over the financial<br />
year, and the variance between performance planned and actual<br />
performance, providing an explanation of the variance. Also<br />
provide details of any improvements planned for next year.<br />
Water services<br />
Water services delivery strategy and main role-players:<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> is acting on behalf of the Chris Hani District <strong>Municipality</strong> as a water services provider,<br />
dealing with day to day operations and maintenance of water services. The role players in this are the District <strong>Municipality</strong>,<br />
Department of Water Affairs, CBO’s, CSP’s and the Local <strong>Municipality</strong> with its communities.<br />
Levels and standards in water services:<br />
The service standard ranges from a basic (RDP) one to a moderate standard mostly in the urban centres. Targeting<br />
in terms of the provision is done by the Water Services Authority which is Chris Hani District <strong>Municipality</strong>.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 17
CHAPTER THREE<br />
MUNICIPAL LOCAL ECONOMIC DEVELOPMENT FRAMEWORK- (KPA 3)<br />
In response to pervasive poverty, under-development and high rate of unemployment of its people, <strong>Intsika</strong><br />
<strong>Yethu</strong> <strong>Municipality</strong> developed its Local Economic Development Strategy (LED Strategy), as a tool that will<br />
guide and inform its growth and development initiatives within the municipality.<br />
The primary goal of the local economic development strategy is to ensure the rejuvenation of the local economy,<br />
facilitate the competitiveness of sectors in which the municipality has a comparative advantage and ensure sustained<br />
economic growth that creates jobs and improve <strong>Intsika</strong> <strong>Yethu</strong> and improves the quality of life of all residents.<br />
The strategy identifies the following sectors; Agriculture, Tourism, Forestry and SMME as critical in transforming<br />
the local economy of <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong>. In essence, the thrust of IYM strategy is underpinned by the following<br />
strategic pillars;<br />
• Coherent agrarian system that promotes agro-processing,<br />
• Institutional innovation and good governance that is complimentary to economic growth and development.<br />
• Promotion of SMME development biased towards rural industrialisation and<br />
• Increased forestry productivity and creation of processing hubs.<br />
Setting of LED unit and the availability of LED expertise<br />
The <strong>Intsika</strong> <strong>Yethu</strong> LED unit is existing and fully functional. It is composed of qualified staff of Manager: LED<br />
and Planning, Secretary, LED Coordinator, Programme Managers (Agric & Forestry, SMME), Tourism Officer,<br />
LED Support Clerk and Tourism Intern.<br />
LED stakeholder forum functionality<br />
The LED Forum is yet to be established, but plans are at an advanced stage to have one at <strong>Intsika</strong> <strong>Yethu</strong>.<br />
Funding opportunities of LED activities<br />
The municipality alone cannot achieve its strategic intent and the strategy therefore has been crafted to accommodate<br />
inputs in the form of funding, skills development and resources from external funders or partners.<br />
Progress towards achieving the LED key objectives<br />
Improve public and market confidence<br />
Progress towards achieving the LED key objectives<br />
(a) Improve public and market confidence<br />
SPATIAL DEVELOPMENT FRAMEWORK<br />
In terms of Section 26(e) of the Municipal Systems Act (Act No. 32 of 2000) the Spatial Development Framework<br />
(SDF) is a legally required component of the <strong>Municipality</strong>’s Integrated Development Framework (IDP) to provide<br />
basic guidelines for a land use management system of the municipality.<br />
The current SDF of <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> dates back to 2006. In order to ensure that development will take<br />
place in an integrated and sustainable manner, the IDP’s and SDF’s of local and district municipalities authorities<br />
have to be updated and aligned with the goals.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 19
The “Spatial Development Framework” (SDF) consists of the following components:<br />
A review of the institutional capacity of the <strong>Municipality</strong> to deal with development applications, with par-<br />
ticular reference to current procedures, which are used to assess development applications. Procedures for<br />
dealing with non compliance and illegal land use activities should be included within this review<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
Current land use patterns of <strong>Intsika</strong> <strong>Yethu</strong><br />
Growth/Demands/ Needs<br />
Spatial imbalances in current land use patterns in the municipality<br />
Analysis of vacant land in the <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Land availability/suitability for future development<br />
Existing infrastructure and capacity implications<br />
Capital expenditure programme for implementing the Spatial Development Framework<br />
Illustrated plan of the desired spatial form<br />
Basic guidelines for land management<br />
Earmark restricted development zone<br />
Heritage sites<br />
Wetland Game and natural reserves<br />
Steep slopes of greater than 1:6<br />
Major river banks<br />
1:50 yrs flood line<br />
Settlement hierarchy<br />
Flexibility (Land use management<br />
Accessibility<br />
Spatial Integration – bringing together previously separate development<br />
Cluster approach<br />
List all projects at a particular location and indicate by arrows<br />
Trends and issues from analysis. Indicate by arrow where development is currently taking place<br />
Any localised land use management principle/guidelines<br />
Project location<br />
Maps<br />
Complete natural environment and biodiversity of the municipal area<br />
A strategic environmental assessment to determine areas where no development should take place<br />
Cadastral and jurisdictional<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 20
The key issues relating to IYM spatial development are as follows:-<br />
o<br />
o<br />
o<br />
o<br />
o<br />
Dispersed Settlement Pattern: Pockets of developed urban centres surrounded by scattered undeveloped<br />
rural villages, which implies great costs to fulfil every basic human right to basic infrastructure and<br />
services<br />
Fragmentation: - There is a high need to systematically address the fragmented nature of development<br />
to promote the integration of urban and rural areas over time (phased development approach which will<br />
optimise on existing capacity and resources to generate the most spin-offs effects from investment).<br />
A strategic approach is required, which enables geographic areas to be prioritised for different levels of<br />
investment to ensure ongoing sustainable development and which will have the most spin-off effects for<br />
continued economic growth in the IYM area.<br />
Limited economic activity outside of urban centres<br />
Need to build on the agricultural and tourism potential of the area and target investment to other LED<br />
related initiatives and programmes taking place outside of the urban centres that have potential for growth<br />
and to generate economic spin – off.<br />
The IYM has many sensitive and conservative worthy areas within its region. The landscape is primarily characterised<br />
by irregular topography with mountain ranges, rolling grassland and various dams and rivers. This special and<br />
multi-faceted environment also presents, many opportunities for the social and economic development of the area.<br />
Land use patterns consist of medium and low residential areas, both formal and informal, light industrial areas and<br />
agricultural areas to a very large extent. The municipality is characterised by a high unemployment rate in all prime<br />
economic sectors. The role of local government is to act as an economic development agent, it is therefore critical<br />
and in order to guide any proposed development and land use management system.<br />
The objectives of our SDF are as follows:-<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
To provide a strategic, indicative and flexible forward planning instrument to guide decisions on land<br />
development.<br />
To provide a set of policies, principles and directives for spatial development<br />
To provide a clear and logical framework for private and public sector investment<br />
To promote sustainable development in terms of the natural and built environment<br />
To facilitate social, economic and environmental sustainability<br />
To provide a framework for dealing with key issues such as natural resources management, land reform<br />
and land use management.<br />
To facilitate the development of aesthetic urban form and landscape.<br />
Updating and refinement of the current SDF document in order to comply with legal requirements and<br />
be conversant with recent developments within the region<br />
Amendment and expansion of the existing documentation based on the NSDP, PGDP, Eastern Cape<br />
Spatial Development Framework, Chris Hani District <strong>Municipality</strong> SDF and IDP (CHDM IDP and IYM<br />
IDP) in order to ensure proper alignment.<br />
Incorporation and alignment of all relevant information and proposals of IYM<br />
Ensuring public and governmental participation of the concerned stakeholders in the planning process,<br />
namely (inter alia) the communities concerned CHDM, EC Province, sector departments, parastatals and<br />
business institutions<br />
Creating a strategic framework to facilitate the development of an appropriate land use system<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 21
The main objective is to produce an SDF, including the following:-<br />
o<br />
o<br />
Display of the circumstances and realities of IYM.<br />
Land Use Guidelines and maps about:-<br />
• Desired patterns of the land use in IYM<br />
• Spatial reconstruction of the municipal landscape, including<br />
• Correction of spatial imbalances and spatial disintegration<br />
• Desired directions of growth<br />
• Movements networks<br />
• Conservation of natural and built environment<br />
• Identification of areas in which particular types of land use should be encouraged or<br />
discouraged<br />
• Areas in which intensity of land developments should be increased or reduced<br />
• Preferential focal areas for certain of land uses of housing<br />
Strategic framework to facilitate the development of an appropriate land use management system.<br />
A chapter on the Land Reform and Settlement Plan, giving an updated summary and indicating the im-<br />
plications<br />
Maps visually indicating, or where appropriate describing the desire spatial form of the municipal area.<br />
Strategic framework and basic guidelines for a land use management system in the municipal area<br />
A Capital Expenditure Framework for the municipality’s development programmes and budget process<br />
A strategic assessment for the environment impact of the SDF<br />
Executive Summary.<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
o<br />
Comparative and Competitive advantage of <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
An analysis of <strong>Intsika</strong> <strong>Yethu</strong> economy indicates that is has high levels of concentration with high dependency on<br />
community services. The analysis of the local economy indicates that sectors with a comparative advantage at<br />
<strong>Intsika</strong> <strong>Yethu</strong> are community services, agriculture, trade and construction. These are the sectors the strategy has<br />
identified as key to unlocking the economic potential of the municipality. In addition to these sectors, tourism has<br />
been identified as having potential for growth.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 22
Intensify Enterprise support and business development<br />
• The type of business development services (BDS) provided to SMME’s<br />
‣ The SMMES across the district have been organised into a business chamber. The purpose is to give them<br />
a voice and to enable them to participate meaningfully to local economic development initiatives of <strong>Intsika</strong><br />
<strong>Yethu</strong>. Secondly, to lobby and influence the municipality and other government sectors and external<br />
donors in areas of their interest.<br />
‣ Training has also been to members of the chamber on various aspects, e.g. business management<br />
• Public and private partnerships established<br />
The partnerships established with strategic partners in 2008/9 are as follows;<br />
‣ Ruliv<br />
‣ Department of Minerals and Energy<br />
‣ Development Bank of South Africa<br />
• Number of new formal SMME established within the municipality<br />
The new formal LED Support structures that were established in are as follows;<br />
‣ Local Tourism Organisation<br />
‣ Chamber<br />
‣ Cooperatives<br />
• Number of new employment opportunities through Expanded Public Works Programs and Public<br />
and Private Partnerships.<br />
The Lapesi project has continued<br />
3.3 Annual performance as per key performance indicators in LED<br />
1<br />
2<br />
3<br />
4<br />
5<br />
Indicator name<br />
Percentage of LED Budget spent on<br />
LED related activities.<br />
Number of LED stakeholder forum<br />
held<br />
Percentage of SMME that have<br />
benefited from a SMME support<br />
program<br />
Number of job opportunities created<br />
through EPWP<br />
Number of job opportunities created<br />
through PPP<br />
Target set for<br />
the year<br />
R5 191<br />
659.00<br />
Achievement level<br />
during the year<br />
(absolute figure)<br />
R4 672<br />
493.10<br />
Achievement percentage<br />
during the<br />
year<br />
90%<br />
nil nil Nil<br />
250 133 53%<br />
2500 1584 63%<br />
nil nil nil<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 23
3.4 Challenges regarding LED strategy implementation<br />
The success of the strategy rests on two main pillars:<br />
a) Buy in and support by all stakeholders identified in the strategy and<br />
b) Resource allocation (people & money) and commitment to implement;<br />
The serious challenge to the implementation of the LED strategy is under-funding. The budget allocated<br />
to LED department is pittance, trivial to an extent that it is a mockery to the very same concept /notion<br />
of local economic development of the area. The solution is simple, more money should be put in the<br />
LED department in a more or less the same level that the Infrastructure department is being funded. The<br />
economic sectors or sector departments should endeavour to plough more money on the strategic programmes<br />
and projects as identified in our LED Strategy.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 24
In order to come out with spatial development proposals for the area, it is essential to come out with the spatial<br />
objectives and strategies as follows:<br />
Objective and Strategies<br />
CHAPTER FOUR<br />
SPATIAL OBJECTIVES AND STRATEGIES<br />
Key Spatial Dev.<br />
Issue<br />
Uneven development<br />
in the area (between<br />
rural and urban<br />
areas).<br />
Fragmented nature<br />
of development in<br />
the area<br />
Untapped development<br />
potential in the<br />
area<br />
Lack of effective<br />
and efficient land use<br />
management system<br />
in the area<br />
Objectives<br />
Encourage urban and regional integration<br />
and rectification of past imbalances.<br />
Provision of appropriate level of services<br />
to meet the needs of the communities in<br />
the <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong>, that is, provision<br />
of basic services based on constitutional<br />
rights.<br />
Prioritised public sector investment in areas<br />
of growth and opportunity.<br />
Target strategic investment in development<br />
zones (focus areas) that have development<br />
potential<br />
Promote the integration of urban and rural<br />
areas in a phased programme.<br />
Promote regional connectivity.<br />
Support local economic opportunities<br />
in the municipal area for local economic<br />
development.<br />
Encourage land reform towards more intensive<br />
land uses.<br />
Protect the natural systems in the area.<br />
Manage dev<br />
Strategies<br />
Establish a clear hierarchy of settlement.<br />
Identify Special Development Areas,<br />
that is, areas of particular development<br />
potential or areas where priority spending<br />
is required (special need areas) – nodal<br />
centres, development corridors, special<br />
development areas.<br />
Develop a settlement pattern which<br />
conforms to the approved zonal policy<br />
of CHDM Land Reform and Settlement<br />
Plan that meets the particular requirements<br />
of the municipality.<br />
Create sustainable human settlement with<br />
quality physical, economic and social<br />
environments.<br />
Planning for densification /infill and<br />
careful expansion of existing settlements<br />
on productive agricultural resources.<br />
Promote integration of spatial development<br />
by means of efficient transport<br />
network system.<br />
Identify and prioritise economic opportunity<br />
areas.<br />
Identify and prioritise strategic economic<br />
linkages<br />
Develop a sustainable local Land Use<br />
Management System to promote co-ordinated,<br />
harmonious and environmentally<br />
sustainable development.
OUTCOMES<br />
The outcome of the above objectives and strategies are indicated in the Table below.<br />
Outcome<br />
Sustainable Environment Accessible <strong>Municipality</strong> An Efficient Community<br />
The responsible use of natural<br />
resources.<br />
A sustainable rates base.<br />
Focused investment.<br />
Sustained economic growth.<br />
Sustainable settlements.<br />
Cultural heritage<br />
A physical urban structure that<br />
promotes accessibility.<br />
Equity within the urban and<br />
rural system<br />
Diversity within urban system.<br />
Form and structure that lead to greater<br />
efficiency.<br />
Protection of existing investments<br />
Open space system<br />
Focus activities and investment.<br />
Infrastructure viability.<br />
Managed growth<br />
SPATIAL DEVELOPMENT PROPOSALS<br />
KEY SPATIAL DEVELOPMENT FEATURES<br />
The Spatial Development Framework is influenced by the following factors:<br />
(i)<br />
(ii)<br />
(iii)<br />
(iv)<br />
(v)<br />
Cofimvaba and Tsomo will remain the primary commercial economic hub of the <strong>Municipality</strong> where<br />
the majority of work opportunities will be established.<br />
The other settlements will serve as service centres with economic growth potentials focusing on tourism<br />
and providing a service to the agricultural community.<br />
An effective road network (although in poor conditions) exists in the study area.<br />
Tourism Potential: The area has significant tourism potential, especially, the natural beauty of the<br />
area including the dams, the spectacular landscape, the cultural heritage and other natural and cultural<br />
resources in the area. The development, marketing and intensive exploitation of the existing tourism<br />
sector should be supported to contribute to future economic growth.<br />
Agricultural Sector: The agricultural sector of the entire <strong>Intsika</strong> <strong>Yethu</strong> is extremely prominent. Future<br />
economic growth in the agricultural sector exists when considering small scale processing industries<br />
and intensive farming activities.<br />
Based on the above factors, the following key development features/ structuring elements have been identified<br />
for <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> SDF.<br />
SPATIAL STRUCTURING ELEMENTS<br />
The SDF needs to be indicative and therefore the need to adopt a set of structuring elements that can guide the<br />
future structure of the urban and rural form of the municipal area must be identified. The following spatial structuring<br />
elements have been identified, namely:<br />
• Development Nodes (informed by settlement hierarchy).<br />
• Development Corridors<br />
• Special Priority Development Areas<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 27
• Strategic Development Zones<br />
• Environmental Management Areas<br />
Development Nodes<br />
These are areas where development (facilities, services and economic opportunities) tends to concentrate. Different<br />
types of nodes can be distinguished, such as, urban nodes, development nodes, social nodes, rural nodes (villages)<br />
and transportation distribution hubs).<br />
The <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> study therefore identifies certain nodes and settlements in line with the levels of<br />
investment and hierarchy (see Map 2.2) but in determining the settlement hierarchy; the following guidelines were<br />
used:<br />
• Settlements with significant economic and physical growth potentials<br />
• Settlement with unique character<br />
• Population<br />
• Functions performed<br />
• Availability of services<br />
• Location characteristics (accessibility and centrality of settlements- transport links, etc)<br />
In line with the CHDM Spatial Development Framework Review (2009/<strong>2010</strong>), the following urban and rural<br />
nodes, based on the settlement hierarchy, have been identified.<br />
Proposed Settlement Hierarchy<br />
Urban Nodes<br />
Node Type Settlement Spatial Development Priorities<br />
Level 2<br />
Major Service Centre<br />
(Regional Service<br />
Centre)<br />
Level 2<br />
Minor Service Centre<br />
(Sub-Regional<br />
Service Centre)<br />
Cofimvaba<br />
(An existing mixed land<br />
uses and key urban node<br />
and a regional centre in<br />
the study area)<br />
Tsomo<br />
(An existing mixed land<br />
use node and a sub- regional<br />
centre).<br />
Land Use Management and Administration<br />
CBD Revitalization and Renewal<br />
Sustainable Human Settlement Programme.<br />
Public-funded Housing Development<br />
Infrastructure and Social Facilities provision and upgrade<br />
Limited urbanization<br />
Urban aesthetics and land use management<br />
Environmental Management (Tourism)<br />
Sustainable Human Settlement Programme.<br />
Public-funded Housing Development<br />
Infrastructure and Social Facilities provision, maintenance<br />
and upgrade<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 28
Rural Nodes<br />
Node Type Settlement Spatial Development Priorities<br />
Level 2<br />
Rural Node<br />
(Rural<br />
Service Centre)<br />
Level 2 – Rural<br />
Villages<br />
Ncora, Qamata/Bilatye<br />
Mtshingeni<br />
Lubisi<br />
Sabalele<br />
All other existing villages<br />
Areas where medium order community facilities can be bundled<br />
in order to ensure that a greater number of rural residents<br />
are served in a more efficient and effective way.<br />
Ideally, these and future rural service centres are located in<br />
close proximity to public transport routes to ensure maximum<br />
accessibility to facilities<br />
Local planning to maximize use of resources<br />
Local land use schemes to be negotiated<br />
Basic level of service extension.<br />
Local planning to maximize use of resources<br />
Local land use schemes to be negotiated<br />
Extracted from CHDM Spatial Development Framework Review (2009/<strong>2010</strong>)<br />
Development Corridors<br />
Development corridors are characterized by higher order ribbon-like development along routes that would otherwise<br />
be classified as movement corridors. These occur on various levels, from local development corridors along<br />
the main streets of the towns or even along rivers to regional and provincial corridors. Different types of corridors<br />
can be distinguished such as development corridors, movement corridors and activity corridors.<br />
The R61 from Queenstown through Cofimvaba, Ngcobo to Mthatha has been identified as the East Corridor,<br />
one of the four major development corridors in the Chris Hani District <strong>Municipality</strong> SDF.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 29
However, this study has identified an additional corridor, Tsomo–Ndabakazi Development Corridor.<br />
Fig. Map 2.2: Development Corridor Strategy<br />
SPECIAL (PRIORITY) DEVELOPMENT AREAS<br />
The Special Development Areas as identified by the CHDM Spatial Development Framework Review<br />
(2009/<strong>2010</strong>) and this study include the following:<br />
(i)<br />
(ii)<br />
(iii)<br />
(iv)<br />
Priority Basic Need Areas.<br />
Targeted Focus Areas as proposed by the CHDM Land Reform and Settlement Plan (2005).<br />
Strategic Development Zones, that is, areas with LED potentials, such as, Agriculture and Forestry<br />
Sectors, Tourism Sector and Manufacturing Sector.<br />
Others – Infrastructure, Housing, Social Services, etc.<br />
Priority Basic Need Areas<br />
These are areas of greatest need, requiring special need for investment to upgrade levels of service (water supply,<br />
sanitation, access roads, electricity, etc) and social facilities (schools, health, community facilities, etc) to the accepted<br />
minimum level to improve the level of well being of communities.<br />
It should involve the investment of basic infrastructure as well as poverty alleviation programmes and projects<br />
such as community gardens, tourism, street trading and other SMME initiatives in <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong>. It<br />
should be indicated that <strong>Intsika</strong> <strong>Yethu</strong> Municipal area falls within the priority basic need areas within the CHDM.<br />
Targeted Focus Areas (Proposed Development Zones)<br />
Six development zones (see Map 2.3) have been identified in the Chris Hani District Land Reform and Settlement<br />
Plan (LR & SP) within which specific land reform and/or settlement planning (spatial planning) and land use management<br />
actions are necessary or desirable. These targeted areas coincide with the proposed settlement hierarchy<br />
(nodal) proposals outlined above. These zones are indicated in the table below.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 30
Land use management:<br />
Number Property Application Applicant Update<br />
1.<br />
Remainder Erf 1,<br />
Cofimvaba<br />
Revitilisation of<br />
Subdivision<br />
Mrs Yengwa<br />
Awaiting Council Resolution<br />
2.<br />
Remainder Erf 1,<br />
Cofimvaba<br />
Subdivision<br />
Eskom TSC<br />
Awaiting Council Resolution<br />
3.<br />
Erf 143, Cofimvaba<br />
Rezoning<br />
Sakawuli’s Properties<br />
Approved by Council,<br />
awaiting approval from<br />
LUMB<br />
4. Erf 24, Cofimvaba Rezoning Mr. Njamela<br />
Approved by Council,<br />
awaiting approval from<br />
LUMB<br />
5.<br />
Erf 147, Cofimvaba<br />
Rezoning<br />
6. Erf 90, Tsomo Rezoning<br />
Sakawuli’s Properties<br />
Mr. Sibulele Khweba<br />
Approved on the<br />
04/07/2008<br />
Approved on the<br />
19/02/2007<br />
7. Erf 14, Cofimvaba Rezoning Zamani Wholesalers<br />
Approved by Council,<br />
awaiting approval from<br />
LUMB<br />
8.<br />
Erf 265, Cofimvaba<br />
Rezoning<br />
Mrs Nophelo Nongwevu<br />
Approved<br />
9. Erf 49, Cofimvaba Rezoning Ms X M Martins Approved<br />
10. Erf 89, Cofimvaba Rezoning Mzingisi Hlanjwa<br />
11.<br />
12.<br />
Erf 265, Cofimvaba<br />
Erf 144, Cofimvaba<br />
Rezoning Mrs N. Nongwevu Approved<br />
Rezoning Mr.N.R.Golifili Approved<br />
13. Erf 94, Cofimvaba Rezoning Mr Somzi<br />
Approved by Council,<br />
awaiting approval from<br />
LUMB<br />
14. Erf 42, Tsomo Rezoning<br />
Mr.<br />
M.M.Mkhunyana<br />
Approved by Council,<br />
awaiting approval from<br />
LUMB<br />
15.<br />
Erf 131-Erf 134,<br />
Cofimvaba<br />
Consolidation and<br />
then Subdivision<br />
Lundi – Luvu Business<br />
Ventures<br />
Approved<br />
16. Erf 79, Cofimvaba Rezoning<br />
17 Erf 30, Cofimvaba Rezoning<br />
Sibiya Jacob Gouman<br />
HDM CON-<br />
STRUCTION<br />
Approved by Council,<br />
awaiting approval from<br />
LUMB<br />
Approved by Council,<br />
awaiting approval from<br />
LUMB<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 31
Number Property Application Applicant Update<br />
18<br />
Erf 186, Cofimvaba<br />
Township Establishment<br />
NPM Planning<br />
Design Stage<br />
19 Thabo Village<br />
Township Establishment<br />
NPM Planning<br />
Approved by Council,<br />
Surveyed awaiting approval<br />
from LUMB<br />
20 Ext 4 Tsomo<br />
Township Establishment<br />
NPM Planning<br />
Approved by Council,<br />
Surveyed awaiting<br />
approved by LUMB,<br />
awaiting approval from<br />
Surveyor General<br />
21<br />
Section C, Ext 4<br />
Cofimvaba<br />
Township Establishment<br />
Pemro<br />
Submitted to LUMB<br />
22<br />
Remainder Erf 1,<br />
Cofimvaba<br />
Rezoning, Subdivision<br />
and Consolidation<br />
Eris Property<br />
Group, Mhlaba<br />
Group<br />
Awaiting approval from<br />
DFA Tribunal<br />
23 Joe Slovo<br />
Township Establishment<br />
Setplan<br />
Awaiting Land Transfer<br />
24 Nyanisweni<br />
Township Establishment<br />
Complan<br />
Complete<br />
25 St Marks 500<br />
Township Establishment<br />
Sektor<br />
Complete<br />
INFRASTRUCTURE ANNUAL REPORT <strong>2010</strong>/11<br />
Basic service delivery area 30 June <strong>2011</strong><br />
Water backlogs (6KL/month) Required Budgeted Actual<br />
Backlogs to be eliminated (n0.<br />
HH not receiving the minimum<br />
standard service)<br />
Backlogs to be eliminated (%:<br />
total HH identified as backlog/<br />
total number of HH in the<br />
municipality<br />
Spending on new infrastructure<br />
to eliminate backlogs (R000)<br />
Spending on renewal of existing<br />
infrastructure to eliminate<br />
backlog (R000)<br />
Total spending to eliminate<br />
backlogs (R000)<br />
90192 R31,468,729<br />
49% R31,468,729<br />
68% R31,468,729 R21,398,735<br />
R590430.00 R401492.40<br />
R91,693,529 R62753092.10<br />
Spending on maintenance to<br />
ensure no new backlogs (R000)<br />
Electricity backlogs<br />
(30KWH/month)<br />
R26000000<br />
R23000000<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 32
Basic service delivery area 30 June <strong>2011</strong> 30 June 200..<br />
Water backlogs (6KL/month) Required Budgeted Actual required budgeted Actual<br />
Backlogs to be eliminated (n0.<br />
HH not receiving the minimum<br />
standard service)<br />
139,923.180 139,923.80 139,923.80 139,923.80<br />
Backlogs to be eliminated (%:<br />
total HH identified as backlog/total<br />
numb of HH in the<br />
municipality<br />
4024 1100<br />
Spending on new infrastructure<br />
to eliminate backlogs (R000)<br />
139,923.180<br />
Spending on renewal of existing<br />
infrastructure to eliminate<br />
backlog (R000)<br />
Total spending to eliminate<br />
backlogs (R000)<br />
Spending on maintenance to<br />
ensure no new backlogs (R000)<br />
Sanitation backlogs<br />
Backlogs to be eliminated (n0.<br />
HH not receiving the minimum<br />
standard service)<br />
112280 R60,224,800 R52265.311<br />
Backlogs to be eliminated (%:<br />
total HH identified as backlog/total<br />
numb of HH in the<br />
municipality<br />
61% R60,224,800 R52265.311<br />
Spending on new infrastructure<br />
to eliminate backlogs (R000)<br />
R52265.311<br />
Spending on renewal of existing<br />
infrastructure to eliminate<br />
backlog (R000)<br />
Total spending to eliminate<br />
backlogs (R000)<br />
Spending on maintenance to<br />
ensure no new backlogs (R000)<br />
R500000.00<br />
R91693.529<br />
R4000000.00<br />
Road maintenance backlogs<br />
Backlogs to be eliminated (n0.<br />
HH not receiving the minimum<br />
standard service)<br />
1050 km R25.5m 1195 km R968.950m R2.875m R2.875m<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 33
Basic service delivery area 30 June <strong>2011</strong> 30 June 200..<br />
Water backlogs (6KL/month) Required Budgeted Actual required budgeted Actual<br />
Backlogs to be eliminated (%:<br />
total HH identified as backlog/total<br />
numb of HH in the<br />
municipality<br />
87.9% 2.6% 0.3% 0.3%<br />
Spending on new infrastructure<br />
to eliminate backlogs (R000)<br />
R75m R34m R34m R120m R25.935m 25.935m<br />
Spending on renewal of existing<br />
infrastructure to eliminate<br />
backlog (R000)<br />
R15m R2.5m R2.5m R15m R2.875m R2.875m<br />
Key Performance<br />
Area<br />
Performance During the Year, Performance Targets Against<br />
Actual Achieved and Plans to Improve Performance<br />
Current<br />
Target<br />
<strong>2010</strong>/11<br />
1.Water treatment.<br />
During the <strong>2010</strong>/11 Financial year, we managed to spend 88% of the<br />
budgeted amount of R26000000.00.<br />
100%<br />
2.Sewage treatment.<br />
Our target for the <strong>2011</strong>/2012 financial year is 100% of the budgeted<br />
amount of R30000000.00 because there has been an improvement in<br />
our systems and new staff members have been employed.<br />
3.water reticulation.<br />
4.Human resource<br />
Management.<br />
5.Financial Management<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 34
1.<br />
Water distribution function’s performance<br />
Function:<br />
Sub<br />
Function:<br />
Water<br />
Water Distribution<br />
Reporting Level Detail Total Cost<br />
Overview: Includes the bulk purchase and distribution of water<br />
Description of<br />
the Activity:<br />
Water distribution<br />
is<br />
When the<br />
communities<br />
are served with<br />
water from<br />
the plant to<br />
the reservoirs<br />
and from the<br />
reservoirs to the<br />
houses or Businesses.<br />
The water purchase and distribution functions of the municipality<br />
are administered as follows and include:<br />
Raw water from dam or river is bought from the department of<br />
water affairs. It is then transported through pipes to the water treatment<br />
plant. From there it is treated with Chemicals and pumped to<br />
the reservoirs.<br />
< The <strong>Municipality</strong> buys raw water from DWA and it is piped to the<br />
water treatment plant. Chemicals which the <strong>Municipality</strong> buys from<br />
the Private sector are added to the water and pumped to the reservoirs.<br />
The cost of water,chemicals and labour are then added to arrive at<br />
the price of treated water.<br />
The mandate of the <strong>Municipality</strong> is to provide water and is not to be<br />
a water services authority.<br />
<br />
The strategic objectives of this function are to:<br />
< To provide clean drinking water and sanitation to the communities<br />
at a minimal cost.<br />
The key issues for <strong>2010</strong>/11 are:<br />
< Fixing of damaged water infrastructure and the target is to get a<br />
blue drop award.<br />
` <br />
1 Number and cost to employer of all personnel associated with the<br />
R (000s)<br />
water distribution function:<br />
- Professional (Engineers/Consultants)<br />
- Field (Supervisors/Foremen) 4 R104000.00<br />
- Office (Clerical/Administration) 3 R442000.00<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 35
Reporting Level Detail Total Cost<br />
- Non-professional (blue collar, outside workforce) 43 R2064000.00<br />
- Temporary <br />
- Contract <br />
Note: total number to be calculated on full-time equivalent (FTE)<br />
basis, total cost to include total salary package.<br />
2 Percentage of total water usage per month<br />
77.8% 32.96Ml<br />
Note: this will therefore highlight percentage of total water stock<br />
used per month<br />
3 Total volume and cost of bulk water purchases in kilolitres and rand,<br />
R (000s)<br />
by category of consumer<br />
- Category 1 42.3Ml R6768.00<br />
- Category 2 <br />
- Category 3 <br />
- Category 4 <br />
4 Total volume and receipts for bulk water sales in kilolitres and rand,<br />
R (000s)<br />
by category of consumer:<br />
- Category 1 ) 395.6Ml R1978000.00<br />
- Category 2 (total number of households) <br />
- Category 3 (total number of households) <br />
- Category 4 (total number of households) <br />
5 Total year-to-date water losses in kilolitres and rand R (000s)<br />
200m from dwelling same <br />
- Borehole 174862 <br />
- Spring <br />
- Rain-water tank <br />
Note: if other types of services are available, please provide details<br />
7 Number and cost of new connections: R (000s)<br />
3681 <br />
8 Number and cost of disconnections and reconnections: R (000s)<br />
<br />
9 Number and total value of water projects planned and current: R (000s)<br />
- Current (financial year after year <strong>report</strong>ed on) 17 31,468,729<br />
- Planned (future years) `<br />
Note: provide total project and project value as per initial or revised<br />
budget<br />
10 Anticipated expansion of water service: R (000s)<br />
- Piped water inside dwelling <br />
- Piped water inside yard <br />
INTSIKA YETHU LOCAL MUNICIPALITY / 36
- Piped water on community stand: distance < 200m from dwelling <br />
- Piped water on community stand: distance > 200m from dwelling <br />
- Borehole <br />
- Spring <br />
- Rain-water tank <br />
Note: provide total number of households anticipated to benefit and<br />
total additional operating cost per year to the municipality<br />
11 Estimated backlog in number (and cost to provide) water connection: R (000s)<br />
- Piped water inside dwelling <br />
- Piped water inside yard <br />
- Piped water on community stand: distance < 200m from dwelling 90192 <br />
- Piped water on community stand: distance > 200m from dwelling <br />
- Borehole <br />
- Spring <br />
- Rain-water tank <br />
Note: total number should appear in IDP, and cost in future budgeted<br />
capital housing programmes<br />
12 Free Basic Service Provision:<br />
- Quantity (number of households affected) 180384<br />
- Quantum (value to each household) <br />
Note: Provide details of how many households receive the FBS<br />
provision, and the average value it means per household. Describe in<br />
detail the level of Free Basic Services provided.<br />
13 Type and number of grants and subsidies received: R (000s)<br />
ROLE PLAYERS Roles RESPONSIBILITIES<br />
MUNICIPALITY<br />
• Municipal Council<br />
To deliver houses<br />
Prioritise housing project.<br />
Identification of the need or demand<br />
for housing .<br />
Ensure that the housing sector<br />
plan is in place.<br />
• Municipal Officials<br />
Register beneficiaries<br />
Ensuring the demand is a chapter<br />
in the IDP.<br />
• Communities<br />
• Traditional leaders<br />
• Town Planners<br />
• Surveyors<br />
• Conveyances<br />
Agree on the land to be utilised<br />
Approve land for development<br />
Produce an approved layout<br />
plans for the identified area<br />
To provide an approved SG diagram<br />
To register the township and<br />
beneficiaries<br />
Categorise the communities according<br />
to their housing needs<br />
and income levels, in order to<br />
provide for them accordingly.<br />
Ensure that you obtain well<br />
located land for the different levels<br />
of the communities.<br />
Ensure that the land belongs to<br />
the municipality.<br />
Engage planners to prepare layout<br />
plans and lodge the layout plans to<br />
the land use board. After approval<br />
Surveys must be made and lodged<br />
with the surveyor general<br />
Apply for funding<br />
Provincial Department<br />
National Department of Human Settlements<br />
Receive the Business plan and<br />
forward it to the National Department<br />
for funding.<br />
Make approval of the Township<br />
submission.<br />
On approval of the funds .It has<br />
to ensure that the supply chain<br />
processes are followed and the<br />
contractor is introduced to the<br />
municipality<br />
Funding housing programs<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 38
LEVELS & STANDARDS IN HOUSING & TOWN PLANNING SERVICES<br />
LEVELS Standards Town Planning services<br />
Low cost housing<br />
Middle income housing<br />
The complete project has high<br />
standard as it was a pilot for even<br />
the Provincial Govt.<br />
No delivery yet but provisions<br />
are underway. Thabo Village will<br />
be our show case that will be an<br />
integration of both the middle<br />
income housing, CRU and social<br />
housing<br />
They met the standards though<br />
they were outsourced<br />
The project is in the stage of approval<br />
from the land use board as<br />
well as consolidation of even for<br />
CRUs<br />
Indicator Name<br />
Total Number of<br />
households/customers<br />
Estimated<br />
backlog(Actual<br />
Number)<br />
Target for<br />
the following<br />
yr<br />
No. of<br />
Households<br />
% of<br />
Achievement<br />
during the<br />
yr.<br />
% of the households<br />
living in<br />
informals<br />
1.3%<br />
% of informal<br />
settlements that<br />
have been provided<br />
with basic services<br />
% of households<br />
informal housing<br />
that conforms to<br />
the minimum building<br />
standards for<br />
residential Houses<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 39
1.27 SPATIAL PLANNING<br />
PREPARATION AND APPROVAL OF SDF PROCESSES<br />
Dissemination strategy: SDF is obtainable from the municipal website<br />
In an electronic Version obtainable in the municipal office<br />
In a hard copy in the municipal offices<br />
Community involvement in developing the SDF document<br />
Implementation: Reference is made to the SDF for any spatial provision<br />
It assists in explaining the different nodes as planned.<br />
It is used as a guiding document in any project.<br />
All projects are in line with the SDF.<br />
SUBMITTED APPLICATIONS<br />
Rezoning Sub-Division Consent Use Removal Of Restrictions<br />
6 2 0 0 1<br />
Township<br />
Establishments<br />
MAJOR CHALLLENGES IN SPATIAL PLANNING SERVICES AND REMEDIAL<br />
ACTIONS<br />
1.<br />
2.<br />
Suitable and surveyed areas are invaded<br />
Communities do not want to comply with legislative requirements such as registering land, submitting building<br />
plans etc.<br />
REMEDIAL ACTION<br />
Evictions<br />
Law enforcement<br />
Awareness on impact of invasion<br />
GOOD GOVERNANCE AND PUBLIC PARTICIPATION<br />
Overview of the executive and council functions and achievements<br />
<strong>Intsika</strong> <strong>Yethu</strong> Local <strong>Municipality</strong> is governed by a council of 46 members and an Executive Committee of 9<br />
members including the mayor. A number of members of the Executive Committee preside over specific portfolio<br />
committees; this ensures active participation by councillors. The function of Council and the Executive Committee<br />
are:<br />
The Council<br />
The Speaker is responsible for the legislative function of the council. The legislative functions of the council<br />
include:<br />
-<br />
-<br />
The passing of by-laws and formulation of policies<br />
The oversight of the executive and administration<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 40
-<br />
-<br />
-<br />
-<br />
The approval and amendment of rates and other taxes, levies, and duties<br />
The approval or amendment of the municipality Integrated Development Plan<br />
The setting of tariff charges<br />
The entering into <strong>Municipality</strong> Service Partnerships and the appointment of the section of section 57<br />
manager<br />
The Executive Committee<br />
The Executive Committee is responsible for the overall management, coordination, monitoring the performance<br />
of administration programmes, prioritisation and drafting of policies and by-laws. The municipality has 5 standing<br />
committees. The municipality has established these committees according to the Municipal Structures Act.<br />
Public participation and consultation<br />
During the Mayoral Imbizo’s the municipality utilises a local radio station (Vukani FM) and local newspaper<br />
(Skawara News) as a means of consulting and mobilising its communities, as it is very paramount for them to have<br />
a say in council decisions and service delivery.<br />
The Ward Councillors together with Community Development workers and Ward Committees also played a vital<br />
role as they serve as the close link between the communities and the municipality in mobilising for such occasions.<br />
When there is a public hearing, proper communications are made through announcements in community radio i.e.<br />
Vukani Community Radio. Public Hearings also publicised by two way communication that is in between the ward<br />
councillor and the residents at large and also the CDW’s. The municipality has also enhanced the way of conveying<br />
the message when there will be public hearing and imbizo’s through the tool of loud hailing to its communities.<br />
Customer Satisfaction Surveys: English and Xhosa questionnaires are established and made available to measure<br />
the satisfaction of the public/ commuters. These questionnaires distributed and then collected quarterly to all 23<br />
wards of the <strong>Intsika</strong> <strong>Yethu</strong> municipality as the way of getting feedback from the public.<br />
Ward committees’ establishment and functionality<br />
As the Handbook of Ward Committees outlines that during the sitting of the meetings of the ward committee<br />
members, the ward councillor of that particular ward is regarded as chairperson. According to the <strong>report</strong>s forwarded<br />
by the ward councillor to the Speaker’s Office that are furnished by credential lists shown a good attendance of<br />
the committee members into wards meetings.<br />
As the ward committee members are ward based and their meetings are convened and held in their respective<br />
wards, the minutes are written and filled by committee secretaries and some copies are forwarded to their ward<br />
councillors.<br />
Availability of ward committee activity <strong>report</strong>s: each and every ward had its own program of action where each<br />
committee member performs his/her tasks and in turn <strong>report</strong>s to his/her ward councillor.<br />
Community Development Workers performance monitoring<br />
To try and monitor the Community Development Work, the municipality has purchased a prefab which will be<br />
utilised as offices by CDW’s. That will make it easy for the municipality to work and monitor the CDW’s. A full<br />
time municipal official was made available for coordinate CDW’s. The municipality has made sits available for<br />
CDW’s in the council meeting to make it easy for issues for the CDW’s to follow and understand matters of local<br />
government and development.<br />
The municipality is in the process of coordinating the <strong>report</strong>s of the CDW’s and assist where necessary before<br />
they are forwarded to the province.<br />
As we all know that the CDWs are ward based and regarded as the foot soldiers for service delivery, they compile<br />
<strong>report</strong>s based on their findings in their wards. The monthly <strong>report</strong>s are handed over to the speaker’s office and<br />
to the Department of Local Government and Traditional Affairs.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 41
A vast number of cases are identified and <strong>report</strong>ed in almost all the 23 wards of <strong>Intsika</strong> <strong>Yethu</strong> jurisdiction each and<br />
every month. Interventions by Government Departments in these cases are required.<br />
CDWs also play a prominent role as publicity and mobilising tool for municipal and government sector gatherings<br />
in their wards.<br />
Communication Strategy<br />
The strategy is guided by the Integrated Development Plan (IDP) which seeks to achieve the prescriptions of our<br />
vision and mission, the Provincial Growth and Development Plan (PGDP), Public Participation Framework 2005.<br />
The National Government Communications Plan and the SALGA National Communications Conference Resolutions<br />
(May 2006).<br />
The municipality has completed the development of the Communication Strategy. This strategy is reviewed on a<br />
yearly basis. This programme was spear headed by the Department of Corporate Services. The strategy is to work<br />
towards achieving the goals of the Institution.<br />
Objectives<br />
To encourage meaningful public participation through promotion of government programmes.<br />
To promote and articulate <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> plans policies and achievements.<br />
To facilitate proactive communication on matters of disaster risk management, health and environmental issues.<br />
To strengthen and improve internal communication systems.<br />
To reinforce intergovernmental relations through coordination of communication programmes and activities<br />
amongst the three spheres of government<br />
To create and maintain sound relations with the media houses<br />
The document was presented to Executive Committee off the municipality and it was approved and it still waiting<br />
for approval of the Council.<br />
There is one communication official responsible for the section of communication. The office does have enough<br />
infrastructure to utilise when participating in communication activities.<br />
Anti-Corruption Strategy<br />
The municipality utilises an anti-corruption strategy document that was developed by the Department of Local<br />
Government through a service provider. The municipality in the process of implementing the strategy.<br />
Inter-governmental Relations<br />
An Inter-governmental Forum sits on quarterly basis during the financial year.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 42
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
ANNUAL FINANCIAL STATEMENTS<br />
for the year ended 30 June <strong>2010</strong><br />
INTSIKA YETHU LOCAL MUNICIPALITY / 43
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
STATEMENT OF FINANCIAL POSITION<br />
as at 30 June <strong>2010</strong><br />
Note <strong>2010</strong> 2009<br />
R<br />
R<br />
ASSETS<br />
Current assets<br />
Cash and cash equivalents 1 24 931 734 24 458 515<br />
Trade receivables from exchange transactions 3 309 186 1 201 570<br />
Other receivables from non-exchange transactions 4 621 802 1 215 487<br />
Other receivables from exchange transactions 5 9 876 467 5 286 093<br />
Investments 6 2 856 693 2 315 274<br />
VAT receivable 10 1 825 693 10 308 984<br />
Non-current assets<br />
Investments 7 - 208 995<br />
Property, plant and equipment 8 28 601 130 -<br />
Total assets 69 022 705 44 994 917<br />
LIABILITIES<br />
Current liabilities<br />
Trade and other payables from exchange transactions 9 11 064 350 3 733 534<br />
Current portion of borrowings 12 121 795 192 051<br />
Non-current liabilities<br />
Non-current borrowings 12 3 524 429 3 680 911<br />
Total liabilities 14 710 574 7 606 497<br />
Net assets 54 312 131 37 388 420<br />
NET ASSETS<br />
Accumulated surplus / (deficit) 54 312 131 37 388 420<br />
Total net assets<br />
54 312 131 37 388 420<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 44
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
STATEMENT OF FINANCIAL PERFORMANCE<br />
for the year ending 30 June<br />
Note <strong>2010</strong> 2009<br />
R<br />
R<br />
Revenue<br />
Property rates 15 1 617 990 1 074 372<br />
Service charges 16 273 498 292 861<br />
Rental of facilities and equipment 17 668 323 607 880<br />
Interest earned - external investments 18 1 552 789 2 385 883<br />
Interest earned - outstanding receivables 19 90 896 126 608<br />
Fines 70 910 27 133<br />
Licences and permits 667 617 504 054<br />
Government grants and subsidies 20 81 116 840 67 658 106<br />
Other income 21 2 608 123 393 549<br />
Total revenue 88 666 985 73 070 446<br />
Expenses<br />
Employee related costs 22 30 655 009 21 465 921<br />
Remuneration of councillors 23 10 269 294 9 639 112<br />
Bad debts 2 819 204 -<br />
Repairs and maintenance 3 004 345 1 474 703<br />
Finance costs 24 - 80 036<br />
Bulk purchases 25 - -<br />
Contracted services 26 113 229 188 486<br />
General expenses 27 24 881 959 27 901 139<br />
Total expenses 71 743 039 60 749 397<br />
Surplus / (deficit) for the period 16 923 946 12 321 049<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 45
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
STATEMENT OF CHANGES IN NET ASSETS<br />
as at 30 June <strong>2010</strong><br />
Accumulated<br />
Surplus/(Deficit)<br />
Total: Net<br />
Assets<br />
Note R R<br />
Balance at 30 June 2008 37 471 253 37 471 253<br />
Changes in accounting policy 31 (18 327 664) (18 327 664)<br />
Correction of prior period error 6 062 188 6 062 188<br />
Restated balance 25 205 777 19 143 589<br />
Correction of prior period error 32 (138 406) (138 406)<br />
Surplus / (deficit) for the period 12 321 049 12 321 049<br />
Balance at 30 June 2009 37 388 420 31 326 232<br />
c 32 (236) (236)<br />
Restated balance 37 388 184 37 388 184<br />
Surplus / (deficit) for the period 16 923 946 16 923 946<br />
Balance at 30 June <strong>2010</strong> 54 312 131 54 312 131<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 46
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
CASH FLOW STATEMENT<br />
as at 30 June <strong>2010</strong><br />
Note <strong>2010</strong> 2009<br />
R<br />
R<br />
CASH FLOWS FROM OPERATING ACTIVITIES<br />
Cash receipts from ratepayers, government and others 92 420 560 66 281 904<br />
Cash paid to suppliers and employees (64 763 157) (54 788 780)<br />
28 27 657 402 11 493 124<br />
Interest received 1 643 684 2 512 491<br />
Interest paid - (80 036)<br />
Net cash flows from operating activities 29 301 087 13 925 579<br />
CASH FLOWS FROM INVESTING ACTIVITIES<br />
Purchase of fixed assets (28 601 130) (19 651 610)<br />
Proceeds from sale of investments 16 666 484<br />
Net cash flows from investing activities (28 601 130) (2 985 126)<br />
CASH FLOWS FROM FINANCING ACTIVITIES<br />
Proceeds from borrowings - 3 872 962<br />
Repayment of borrowings (226 738) -<br />
Net cash flows from financing activities (226 738) 3 872 962<br />
Net increase / (decrease) in net cash and cash equivalents 473 218 14 813 415<br />
Net cash and cash equivalents at beginning of period<br />
Net cash and cash equivalents at end of<br />
period<br />
24 458 516 9 645 101<br />
29 24 931 734 24 458 516<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 47
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES<br />
for the year ending 30 June <strong>2010</strong><br />
1 BASIS OF ACCOUNTING<br />
1.1 BASIS OF PRESENTATION<br />
The <strong>annual</strong> financial statements have been prepared on an accrual basis of accounting and are in<br />
accordance with historical cost convention unless specified otherwise.<br />
These <strong>annual</strong> financial statements have been prepared in accordance with Generally Recognised<br />
Accounting Practice (GRAP), issued by the Accounting Standards Board in accordance with Section<br />
122(3) of the Municipal Finance Management Act, (Act No 56 of 2003).<br />
In accordance with section 122(3) of the Municipal Finance Management Act (Act No.56 of 2003),<br />
the <strong>Municipality</strong> has adopted Standards of GRAP and the transitional provisions as applicable as<br />
issued by the Accounting Standards Board during the financial year, which are fundamentally different<br />
to the fund accounting policies adopted in previous financial years. Comparative amounts<br />
have been restated retrospectively to the extent possible.<br />
The principal accounting policies adopted in the preparation of these <strong>annual</strong> financial statements<br />
Those standards of GRAP and interpretations of such standards applicable to the operations of the<br />
GRAP 1<br />
GRAP 2<br />
GRAP 3<br />
GRAP 5<br />
GRAP 6<br />
GRAP 9<br />
Presentation of Financial Statements<br />
Cash flow statements<br />
Accounting Policies, Changes in Accounting Estimates and Errors<br />
Borrowing Costs<br />
Consolidated and Separate Financial Statements<br />
Revenue from Exchange Transactions<br />
GRAP 12 Inventories<br />
GRAP 13 Leases<br />
GRAP 14<br />
GRAP 16<br />
GRAP 17<br />
GRAP 19<br />
GRAP 100<br />
GRAP 102<br />
IPSAS 20<br />
IPSAS 21<br />
Events after the Reporting Date<br />
Investment Property<br />
Property, Plant and Equipment<br />
Provisions, Contingent Liabilities and Contingent Assets<br />
Non-current Assets Held for Sale and Discontinued Operations<br />
Intangible Assets<br />
Related Pary Disclosure<br />
Impairment of Non Cash-Generating Assets<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 48
IFRS 7<br />
IAS 19<br />
IAS 32<br />
IAS 36<br />
IAS 39<br />
IFRIC 4<br />
Financial Instruments: Disclosure<br />
Employee Benefits<br />
Financial Instruments: Presentation<br />
Impairment of Assets<br />
Financial Instruments: Recognition and Measurement<br />
Determining whether an arrangement contains a lease<br />
The standards prescribed are the effective Standards of Generally Recognised Accounting Practice<br />
(GRAP), inlcuding any interpretations and directives issued by the Accounting Standards Board. The<br />
impact of the mentined directives on the financial statements, specifically Directive 4 is disclosed in<br />
the various accounting policies below.<br />
Assets, liabilities, revenues and expenses have not been offset except when offsetting is required or<br />
permitted by a Standard of GRAP.<br />
The accounting policies applied are consistent with those used to present the previous year’s financial<br />
statements, unless explicitly stated. The details of any changes in accounting policies are<br />
explained in the relevant policy.<br />
1.2 PRESENTATION CURRENCY<br />
These <strong>annual</strong> financial statements are presented in South African Rand, which is the functional currency<br />
of the municipality.<br />
1.3 GOING CONCERN ASSUMPTION<br />
These <strong>annual</strong> financial statements have been prepared on the assumption that the municipality will<br />
continue to operate as a going concern for at least the next 12 months.<br />
1.4 COMPARATIVE INFORMATION<br />
Budget information in accordance with GRAP 1 and 24, has been provided in the notes to these<br />
financial statements and forms part of the audited <strong>annual</strong> financial statements.<br />
When the presentation or classification of items in the <strong>annual</strong> financial statements is amended,<br />
prior period comparative amounts are restated. The nature and reason for the reclassification is<br />
disclosed. Where accounting errors have been identified in the current year, the correction is made<br />
retrospectively as far as is practicable, and the prior year comparatives are restated accordingly.<br />
Where there has been a change in accounting policy in the current year, the adjustment is made<br />
retrospectively as far as is practicable, and the prior year comparatives are restated accordingly.<br />
1.5<br />
STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EF-<br />
FECTIVE<br />
The following GRAP standards have been issued but are not yet effective and have not been early<br />
adopted by the municipality:<br />
GRAP 18 Segment Reporting - issued March 2005<br />
GRAP 21 Impairment of non cash generating assets - issued March 2009<br />
GRAP 23 Revenue from Non-Exchange Transactions (Taxes and Transfers) - issued February 2008<br />
GRAP 24 Presentation of Budget Information in Financial Statements - issued November 2007<br />
GRAP 25 Employee benefits - issued November 2009<br />
GRAP 26 Impairment of cash generating assets - issued March 2009<br />
GRAP 103 Heritage Assets - issued July 2008<br />
GRAP 104 Financial Instruments - issued October 2009<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 49
Application of all of the above GRAP standards will be effective from a date to be announced by<br />
the Minister of Finance. This date is not currently available.<br />
The following standards, amendments to standards and interpretations have been issued but are<br />
not yet effective and have not been early adopted by the municipality:<br />
IAS 19 Employee Benefits - effective 1 January 2009<br />
IFRIC 17 Distribution of Non-cash Assets to Owners - effective 1 July 2009<br />
IAS 39 Financial Instruments: Recognition and Measurement - portions of standard effective 1 July<br />
2009<br />
IFRS 7 Financial Instrument Disclosure - issued August 2009<br />
Management has considered all of the above mentioned GRAP standards issued but not yet effective<br />
and anticipates that the adoption of these standards will not have a significant impact on the<br />
financial position, financial performance or cash flows of the municipality.<br />
2 PROPERTY, PLANT AND EQUIPMENT<br />
2.1 INITIAL RECOGNITION<br />
Property, plant and equipment are tangible non-current assets (including infrastructure assets) that<br />
are held for use in the production or supply of goods or services, rental to others, or for administrative<br />
purposes, and are expected to be used during more than one year. Items of property, plant and<br />
equipment are initially recognised as assets on acquisition date and are initially recorded at cost.<br />
The cost of an item of property, plant and equipment is the purchase price and other costs attributable<br />
to bring the asset to the location and condition necessary for it to be capable of operating in the<br />
manner intended by the municipality. Trade discounts and rebates are deducted in arriving at the<br />
cost. The cost also includes the necessary costs of dismantling and removing the asset and restoring<br />
the site on which it is located.<br />
When significant components of an item of property, plan and equipment have different useful lives,<br />
they are accounted for as separate items (major components) of property, plant and equipment.<br />
Where an asset is acquired by the municipality for no or nominal consideration (i.e. a non-exchange<br />
transaction), the cost is deemed to be equal to the fair value of that asset on the date acquired.<br />
Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset<br />
or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is<br />
initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, it’s<br />
deemed cost is the carrying amount of the asset(s) given up.<br />
Major spare parts and servicing equipment qualify as property, plant and equipment when the municipality<br />
expects to use them during more than one period. Similarly, if the major spare parts and<br />
servicing equipment can be used only in connection with an item of property, plant and equipment,<br />
they are accounted for as property, plant and equipment.<br />
2.2 SUBSEQUENT MEASUREMENT - COST MODEL<br />
Subsequent to initial recognition, items of property, plant and equipment are measured at cost less<br />
accumulated depreciation and impairment losses. Land is not depreciated as it is deemed to have<br />
an indefinite useful life.<br />
Where the municipality replaces parts of an asset, it derecognises the part of the asset being replaced<br />
and capitalises the new component. Subsequent expenditure incurred on an asset is capitalised<br />
when it increases the capacity or future economic benefits associated with the asset.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 50
2.3 DEPRECIATION AND IMPAIRMENT<br />
Depreciation is calculated on the depreciable amount, using the straight-line method over the estimated<br />
useful lives of the assets. Depreciation only commences when the asset is available for use,<br />
unless stated otherwise. Components of assets that are significant in relation to the whole asset and<br />
that have different useful lives are depreciated separately. The <strong>annual</strong> depreciation rates are based<br />
on the following estimated average asset lives:<br />
Infrastructure<br />
Other<br />
Roads and Paving 10 years Buildings 30 years<br />
Sewerage 15 years Office equipment 3- 5 years<br />
Furniture and fittings<br />
10 years<br />
Bins and containers<br />
5-10 years<br />
Community Landfill sites 30 years<br />
Buildings 30 years Computer equipment 4 years<br />
Halls<br />
30 years<br />
Libraries<br />
30 years<br />
Other assets<br />
30 years<br />
The residual value, the useful life of an asset and the depreciation method is reviewed <strong>annual</strong>ly<br />
and any changes are recognised as a change in accounting estimate in the Statement of Financial<br />
Performance.<br />
The municipality tests for impairment where there is an indication that an asset may be impaired.<br />
An assessment of whether there is an indication of possible impairment is done at each <strong>report</strong>ing<br />
date. Where the carrying amount of an item of property, plant and equipment is greater than the<br />
estimated recoverable amount (or recoverable service amount), it is written down immediately to<br />
its recoverable amount (or recoverable service amount) and an impairment loss is charged to the<br />
Statement of Financial Performance.<br />
2.4 DERECOGNITION<br />
Items of Property, plant and equipment are derecognised when the asset is disposed of or when<br />
there are no further economic benefits or service potential expected from the use of the asset. The<br />
gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined<br />
as the difference between the sales proceeds and the carrying value and is recognised in<br />
the Statement of Financial Performance.<br />
2.5 TRANSITIONAL PROVISION<br />
In terms of Directive 4 the municipality are not required to measure property, plant and equipment<br />
for <strong>report</strong>ing periods beginning on or after a date within three years following the date of initial<br />
adoption of the Standard of GRAP on Property, Plant and Equipment. The Standard of GRAP on<br />
Property, Plant and Equipment was initially adopted on 1 July 2009.<br />
Due to the fact that the municipality has taken advantage of the transitional provisions, property,<br />
plant and equipment were not recognised and measured in accordance with the Standards of GRAP<br />
on: Property, Plant and Equipment, the Presentation of Financial Statements and Non-current Assets<br />
Held for Sale and Discontinued Operation.<br />
Property, plant and equipment acquired prior to the date of initial adoption of the Standard of GRAP<br />
are measured at provisional amounts (Nil value) in line with Directive 4. Additions to property, plant<br />
and equipment since the Standard of GRAP of Property, Plant and Equipment was initially adopted<br />
are recognised at cost. No depreciation is recognised on these assets as all the related elements of<br />
the depreciation calculation could not be considered at year end.<br />
No measurement adjustments were made for the year ending 30 June <strong>2010</strong>.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 51
3 INTANGIBLE ASSETS<br />
3.1 INITIAL RECOGNITION<br />
An intangible asset is an identifiable non-monetary asset without physical substance. Examples include<br />
computer software, licences, and development costs. The municipality recognises an intangible<br />
asset in its Statement of Financial Position only when it is probable that the expected future<br />
economic benefits or service potential that are attributable to the asset will flow to the municipality<br />
and the cost or fair value of the asset can be measured reliably.<br />
Internally generated intangible assets are subject to strict recognition criteria before they are capitlised.<br />
Research expenditure is never capitalised, while development expenditure is only capitalised<br />
to the extent that:<br />
• the municipality intends to complete the intangible asset for use or sale;<br />
• it is technically feasible to complete the intangible asset;<br />
• the municipality has the resources to complete the project; and<br />
• it is probable that the municipality will receive future economic benefits or service potential.<br />
Intangible assets are initially recognised at cost.<br />
Where an intangible asset is acquired by the municipality for no or nominal consideration (i.e. a<br />
non-exchange transaction), the cost is deemed to be equal to the fair value of that asset on the date<br />
acquired.<br />
Where an intangible asset is acquired in exchange for a non-monetary asset or monetary assets, or<br />
a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair<br />
value (the cost). If the acquired item’s fair value was not determinable, it’s deemed cost is the carrying<br />
amount of the asset(s) given up.<br />
3.2 SUBSEQUENT MEASUREMENT - COST MODEL<br />
Intangible assets are subsequently carried at cost less accumulated amoritisation and impairments.<br />
The cost of an intangible asset is amortised over the useful life where that useful life is finite. Where<br />
the useful life is indefinite, the asset is not amortised but is subject to an <strong>annual</strong> impairment test.<br />
3.3 AMORTISATION AND IMPAIRMENT<br />
Amortisation is charged so as to write off the cost or valuation of intangible assets over their estimated<br />
useful lives using the straight line method. The <strong>annual</strong> amortisation rates are based on the<br />
following estimated average asset lives:<br />
Computer software<br />
3 - 5 years<br />
The amortisation period and the amortisation method for an intangible asset with a finite useful<br />
life are reviewed at each <strong>report</strong>ing date and any changes are recognised as a change in accounting<br />
estimate in the Statement of Financial Performance.<br />
The municipality tests intangible assets with finite useful lives for impairment where there is an indication<br />
that an asset may be impaired. An assessment of whether there is an indication of possible<br />
impairment is done at each <strong>report</strong>ing date. Where the carrying amount of an item of an intangible<br />
asset is greater than the estimated recoverable amount (or recoverable service amount), it is written<br />
down immediately to its recoverable amount (or recoverable service amount) and an impairment<br />
loss is charged to the Statement of Financial Performance.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 52
3.4 DERECOGNITION<br />
Intangible assets are derecognised when the asset is disposed of or when there are no further economic<br />
benefits or service potential expected from the use of the asset. The gain or loss arising on<br />
the disposal or retirement of an intangible asset is determined as the difference between the sales<br />
proceeds and the carrying value and is recognised in the Statement of Financial Performance.<br />
3.5 TRANSITIONAL PROVISIONS<br />
In terms of Directive 4 the municipality are not required to measure intangible assets for <strong>report</strong>ing<br />
periods beginning on or after a date within three years following the date of initial adoption of the<br />
Standard of GRAP on Intangible assets. The Standard of GRAP on Intangible assets was initially adopted<br />
on 1 July 2009.<br />
Due to the fact that the municipality has taken advantage of the transitional provisions, intangible<br />
assets were not recognised and measured in accordance with the Standards of GRAP on: Intangible<br />
assets, the Presentation of Financial Statements and Non-current Assets Held for Sale and Discontinued<br />
Operation.<br />
4 INVESTMENT PROPERTY<br />
Intangible assets acquired prior to the date of initial adoption of the Standard of GRAP are measured<br />
at provisional amounts (Nil value) in line with Directive 4. Additions to intangible assets since the<br />
Standard of GRAP of Intangible assets was initially adopted are recognised at cost. No depreciation<br />
is recognised on these assets as all the related elements of the depreciation calculation could not<br />
be considered at year end.<br />
No measurement adjustments were made for the year ending 30 June <strong>2010</strong>.<br />
4.1 INITIAL RECOGNITION<br />
Investment property includes property (land or a building, or part of a building, or both land or<br />
buildings held under a finance lease) held to earn rentals and/or for capital appreciation, rather than<br />
held to meet service delivery objectives, the production or supply of goods or services, or the sale of<br />
an asset in the ordinary course of operations.<br />
At initial recognition, the municipality measures investment property at cost including transaction<br />
costs once it meets the definition of investment property. However, where an investment property<br />
was acquired through a non-exchange transaction (i.e. where it acquired the investment property<br />
for no or a nominal value), its cost is its fair value as at the date of acquisition.<br />
The cost of self-constructed investment property is the cost at date of completion.<br />
4.2 SUBSEQUENT MEASUREMENT - COST MODEL<br />
Investment property is measured using the cost model. Under the cost model, investment property<br />
is carried at cost less any accumulated depreciation and any accumulated impairment losses.<br />
Depreciation is calculated on the depreciable amount, using the straight-line method over the estimated<br />
useful lives of the assets. Components of assets that are significant in relation to the whole<br />
asset and that have different useful lives are depreciated separately. The <strong>annual</strong> depreciation rates<br />
are based on the following estimated average asset lives:<br />
Investment property<br />
30 years<br />
4.3 TRANSITIONAL PROVISIONS<br />
In terms of Directive 4 the municipality are not required to measure Investment Property for <strong>report</strong>ing<br />
periods beginning on or after a date within three years following the date of initial adoption of<br />
the Standard of GRAP on Investment property. The Standard of GRAP on Investment property was<br />
initially adopted on 1 July 2009.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 53
Due to the fact that the municipality has taken advantage of the transitional provisions, investment<br />
property were not recognised and measured in accordance with the Standards of GRAP on: Investment<br />
property, the Presentation of Financial Statements and Non-current Assets Held for Sale and<br />
Discontinued Operation.<br />
Investment property acquired prior to the date of initial adoption of the Standard of GRAP are measured<br />
at provisional amounts (Nil value) in line with Directive 4. Additions to investment property<br />
since the Standard of GRAP of Investment property was initially adopted are recognised at cost. No<br />
depreciation is recognised on these assets as all the related elements of the depreciation calculation<br />
could not be considered at year end.<br />
No measurement adjustments were made for the year ending 20 June <strong>2010</strong>.<br />
5 FINANCIAL INSTRUMENTS<br />
5.1 CLASSIFICATION<br />
The classification of financial assets and liabilities into categories, is based on judgement by management.<br />
The municipality classifies financial assets and financial liabilities into the following categories:<br />
The municipality has various types of financial instruments and these can be broadly categorised as<br />
either financial assets or financial liabilities.<br />
A financial asset is any asset that a cash or contractual right to receive cash or another financial asset<br />
or equity. The municipality has the following types of financial assets:<br />
- Investments in fixed deposits (banking institutions)<br />
- Consumer debtors<br />
- Certain other debtors<br />
- Short-term investment deposits<br />
- Bank balances and cash<br />
The financial assets of the municipality are classified as follows into the four categories allowed:<br />
Type of financial asset Classification in terms of IAS 39.09<br />
Short-term investment deposits Held-to-maturity investments<br />
Bank balances and cash Loans and receivables<br />
Consumer debtors Loans and receivables<br />
Other debtors Loans and receivables<br />
Investments in fixed deposits Held-to-maturity investments<br />
Loans and receivables are non derivative financial assets with fixed or determinable payments that<br />
are not quoted in an active market. They are included in current assets, except for maturities greater<br />
than 12 months, which are classified as non-current assets. Loans and receivables are recognised<br />
initially at cost which represents fair value. After initial recognition financial assets are measured at<br />
amortised cost, using the effective interest rate method less a provision for impairment.<br />
Held-to-maturity investments are financial assets with fixed or determinable payments and fixed<br />
maturity where the municipality has the positive intent and ability to hold the investment to maturity.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 54
Cash includes cash on hand (including petty cash) and cash with banks (including call deposits). Cash<br />
equivalents are short-term highly liquid investments, readily convertible into known amounts of<br />
cash, that are held with registered banking institutions with maturities of three months or less and<br />
are subject to an insignificant risk of change in value. For the purposes of the cash flow statement,<br />
cash and cash equivalents comprise cash on hand, deposits held on call with banks, net of bank<br />
overdrafts.<br />
The municipality categorises cash and cash equivalents as financial asset: loans and receivables.<br />
A financial liability is a contractual obligation to deliver cash or another financial asset to another<br />
entity. The municipality has the following types of financial liabilities:<br />
- Long-term liabilities<br />
- Certain other creditors<br />
- Short-term loans<br />
- Current portion of long-term liabilities<br />
There are two main categories of financial liabilities, the classification determining how they are<br />
measured. Financial liabilities may be measured as:<br />
- Fair value through profit or loss; or<br />
- Other financial liabilities<br />
Financial liabilities that are measured at fair value through profit or loss are financial liabilities that<br />
are essentially held for trading (i.e. purchased with the intention to sell or repurchase in the short<br />
term; derivatives other than hedging instruments or are part of a portfolio of financial instruments<br />
where there is recent actual evidence of short-term profiteering or are derivatives). Financial liabilities<br />
that are measured at fair value through profit or loss are stated at fair value, with any resulting<br />
gain or loss recognised in the Statement of Financial Performance.<br />
Any other financial liabilities are classified as “other financial liabilities” and are initially measured at<br />
amortised cost using the effective interest method, with interest expense recognised on an effective<br />
yield basis.<br />
In accordance with IAS 39.09 the financial liabilities of the municipality are all classified as “other<br />
financial liabilities”.<br />
Classification depends on the purpose for which the financial instruments were obtained / incurred<br />
and takes place at initial recognition. Classification is re-assessed on an <strong>annual</strong> basis, except for derivatives<br />
and financial assets designated as at fair value through surplus or deficit, which shall not be<br />
classified out of the fair value through surplus or deficit category.<br />
5.2 INITIAL RECOGNITION<br />
Financial instruments are initially recognised at fair value.<br />
5.3 SUBSEQUENT MEASUREMENT<br />
Financial Assets are categorised according to their nature as either financial assets at fair value<br />
through profit or loss, held-to maturity, loans and receivables, or available for sale. Financial liabilities<br />
are categorised as either at fair value through profit or loss or financial liabilities carried at<br />
amortised cost (“other”). The subsequent measurement of financial assets and liabilities depends<br />
on this categorisation and, in the absence of an approved GRAP Standard on Financial Instruments,<br />
is in accordance with IAS 39.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 55
5.3.1 INVESTMENTS<br />
Investments, which include listed government bonds, unlisted municipal bonds, fixed deposits and<br />
short-term deposits invested in registered commercial banks, are categorised as either held-tomaturity<br />
where the criteria for that categorisation are met, or as loans and receivables, and are<br />
measured at amortised cost. Where investments have been impaired, the carrying value is adjusted<br />
by the impairment loss, which is recognised as an expense in the period that the impairment is<br />
identified. Impairments are calculated as being the difference between the carrying amount and<br />
the present value of the expected future cash flows flowing from the instrument. On disposal of an<br />
investment, the difference between the net disposal proceeds and the carrying amount is charged<br />
or credited to the Statement of Financial Performance.<br />
5.3.2 TRADE AND OTHER RECEIVABLES<br />
Trade and other receivables are categorised as financial assets: loans and receivables and are initially<br />
recognised at fair value and subsequently carried at amortised cost. Amortised cost refers to<br />
the initial carrying amount, plus interest, less repayments and impairments. An estimate is made for<br />
doubtful receivables based on a review of all outstanding amounts at year-end. Significant financial<br />
difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,<br />
and default or delinquency in payments (more than 30 days overdue) are considered indicators<br />
that the trade receivable is impaired. Impairments are determined by discounting expected future<br />
cash flows to their present value. Amounts that are receivable within 12 months from the <strong>report</strong>ing<br />
date are classified as current.<br />
An impairment of trade receivables is accounted for by reducing the carrying amount of trade receivables<br />
through the use of an allowance account, and the amount of the loss is recognised in<br />
the Statement of Financial Performance within operating expenses. When a trade receivable is uncollectible,<br />
it is written off. Subsequent recoveries of amounts previously written off are credited<br />
against operating expenses in the Statement of Financial Performance.<br />
5.3.3 TRADE PAYABLES AND BORROWINGS<br />
Financial liabilities consist of trade payables and borrowings. They are categorised as financial liabilities<br />
held at amortised cost, are initially recognised at fair value and subsequently measured at<br />
amortised cost which is the initial carrying amount, less repayments, plus interest.<br />
5.3.4 CASH AND CASH EQUIVALENTS<br />
Cash includes cash on hand (including petty cash) and cash with banks (including call deposits).<br />
Cash equivalents are short-term highly liquid investments, readily convertible into known amounts<br />
of cash, that are held with registered banking institutions with maturities of three months or less<br />
and are subject to an insignificant risk of change in value. For the purposes of the cash flow statement,<br />
cash and cash equivalents comprise cash on hand, deposits held on call with banks, net of<br />
bank overdrafts. The municipality categorises cash and cash equivalents as financial assets: loans<br />
and receivables.<br />
Bank overdrafts are recorded based on the facility utilised. Finance charges on bank overdraft are<br />
expensed as incurred. Amounts owing in respect of bank overdrafts are categorised as financial liabilities:<br />
other financial liabilities carried at amortised cost.<br />
6 UNAUTHORISED EXPENDITURE<br />
7 IRREGULAR EXPENDITURE<br />
Unauthorised expenditure is expenditure that has not been budgeted, expenditure that is not in<br />
terms of the conditions of an allocation received from another sphere of government, municipality<br />
or organ of state and expenditure in the form of a grant that is not permitted in terms of the Municipal<br />
Finance Management Act (Act No.56 of 2003). Unauthorised expenditure is accounted for<br />
as an expense in the Statement of Financial Performance and where recovered, it is subsequently<br />
accounted for as revenue in the Statement of Financial Performance.<br />
Irregular expenditure is expenditure that is contrary to the Municipal Finance Management Act<br />
(Act No.56 of 2003), the Municipal Systems Act (Act No.32 of 2000), the Public Office Bearers Act<br />
(Act No. 20 of 1998) or is in contravention of the <strong>Municipality</strong>’s supply chain management policy.<br />
Irregular expenditure excludes unauthorised expenditure. Irregular expenditure is accounted for as<br />
expenditure in the Statement of Financial Performance and where recovered, it is subsequently accounted<br />
for as revenue in the Statement of Financial Performance.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 56
Fruitless and wasteful expenditure is expenditure that was made in vain and would have been<br />
avoided had reasonable care been exercised. Fruitless and wasteful expenditure is accounted for<br />
as expenditure in the Statement of Financial Performance and where recovered, it is subsequently<br />
accounted for as revenue in the Statement of Financial Performance.<br />
9 PROVISIONS AND CONTINGENCIES<br />
Provisions are recognised when the municipality has a present or constructive obligation as a result<br />
of past events, it is probable that an outflow of resources embodying economic benefits will be<br />
required to settle the obligation and a reliable estimate of the provision can be made. Provisions<br />
are reviewed at <strong>report</strong>ing date and adjusted to reflect the current best estimate. Where the effect is<br />
material, non-current provisions are discounted to their present value using a pre-tax discount rate<br />
that reflects the market’s current assessment of the time value of money, adjusted for risks specific<br />
to the liability.<br />
The municipality does not recognise a contingent liability or contingent asset. A contingent liability<br />
is disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.<br />
A contingent asset is disclosed where an inflow of economic benefits is probable.<br />
Future events that may affect the amount required to settle an obligation are reflected in the<br />
amount of a provision where there is sufficient objective evidence that they will occur. Gains from<br />
the expected disposal of assets are not taken into account in measuring a provision. Provisions are<br />
not recognised for future operating losses. The present obligation under an onerous contract is recognised<br />
and measured as a provision.<br />
10 LEASES<br />
A provision for restructuring costs is recognised only when the following<br />
criteria over and above the recognition criteria of a provision have been met<br />
: (a) The municipality has a detailed formal plan<br />
for the restructuring identifying at least:<br />
- the business or part of a business<br />
concerned;<br />
- the principal locations affected;<br />
- the location, function,<br />
and approximate number of employees who will be compensated for terminating their services;<br />
- the expenditures that will be undertaken; an<br />
d<br />
- when the plan will be implemented; an<br />
d<br />
(b) The municipality has raised a valid expectation in those affected that it will carry out the restructuring<br />
by starting to implement that plan or announcing its main features to those affected by<br />
it.<br />
10.1 MUNICIPALITY AS LESSEE<br />
Leases are classified as finance leases where substantially all the risks and rewards associated with<br />
ownership of an asset are transferred to the municipality. Property, plant and equipment or intangible<br />
assets subject to finance lease agreements are initially recognised at the lower of the asset’s<br />
fair value and the present value of the minimum lease payments. The corresponding liabilities are<br />
initially recognised at the inception of the lease and are measured as the sum of the minimum lease<br />
payments due in terms of the lease agreement, discounted for the effect of interest. In discounting<br />
the lease payments, the municipality uses the interest rate that exactly discounts the lease payments<br />
and unguaranteed residual value to the fair value of the asset plus any direct costs incurred.<br />
Subsequent to initial recognition, the leased assets are accounted for in accordance with the stated<br />
accounting policies applicable to property, plant, equipment or intangibles. The lease liability is reduced<br />
by the lease payments, which are allocated between the lease finance cost and the capital repayment<br />
using the effective interest rate method. Lease finance costs are expensed when incurred.<br />
The accounting policies relating to derecognition of financial instruments are applied to lease payables.<br />
The lease asset is depreciated over the shorter of the asset’s useful life or the lease term.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 57
Operating leases are those leases that do not fall within the scope of the above definition. Operating<br />
lease rentals are accrued on a straight-line basis over the term of the relevant lease.<br />
10.2 MUNICIPALITY AS LESSOR<br />
Under a finance lease, the municipality recognises the lease payments to be received in terms of<br />
a lease agreement as an asset (receivable). The receivable is calculated as the sum of all the minimum<br />
lease payments to be received, plus any unguaranteed residual accruing to the municipality,<br />
discounted at the interest rate implicit in the lease. The receivable is reduced by the capital portion<br />
of the lease instalments received, with the interest portion being recognised as interest revenue<br />
on a time proportionate basis. The accounting policies relating to derecognition and impairment of<br />
financial instruments are applied to lease receivables.<br />
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant<br />
lease.<br />
11 REVENUE<br />
11.1 REVENUE FROM EXCHANGE TRANSACTIONS<br />
Revenue from exchange transactions refers to revenue that accrued to the municipality directly<br />
in return for services rendered / goods sold, the value of which approximates the consideration<br />
received or receivable.<br />
Service charges relating to water are based on consumption. Meters are read on a monthly basis<br />
and are recognised as revenue when invoiced. Provisional estimates of consumption are made<br />
monthly when meter readings have not been performed. The provisional estimates of consumption<br />
are recognised as revenue when invoiced. Adjustments to provisional estimates of consumption are<br />
made in the invoicing period in which meters have been read. These adjustments are recognised as<br />
revenue in the invoicing period. The estimates of consumption between meter readings are based<br />
on the previous three months average usage.<br />
Service charges relating to refuse removal are recognised on a monthly basis in arrears by applying<br />
the approved tariff to each property that has improvements.<br />
Service charges from sewerage and sanitation are based on the number of sewerage connections on<br />
each developed property using the tariffs approved from Council and are levied monthly.<br />
Interest revenue is recognised on a time proportion basis.<br />
Revenue from the rental of facilities and equipment is recognised on a straight-line basis over the<br />
term of the lease agreement.<br />
Dividends are recognised on the date that the <strong>Municipality</strong> becomes entitled to receive the dividend.<br />
Revenue arising from the application of the approved tariff of charges is recognised when the relevant<br />
service is rendered by applying the relevant gazetted tariff. This includes the issuing of licences<br />
and permits.<br />
Revenue from the sale of goods is recognised when substantially all the risks and rewards in those<br />
goods is passed to the consumer.<br />
Revenue arising out of situations where the municipality acts as an agent on behalf of another entity<br />
(the principal) is limited to the amount of any fee or commission payable to the municipality as<br />
compensation for executing the agreed services.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 58
11.2 REVENUE FROM NON-EXCHANGE TRANSACTIONS<br />
Revenue from non-exchange transactions refers to transactions where the municipality received<br />
revenue from another entity without directly giving approximately equal value in exchange. Revenue<br />
from non-exchange transactions is generally recognised to the extent that the related receipt<br />
or receivable qualifies for recognition as an asset and there is no liability to repay the amount.<br />
Revenue from property rates is recognised when the legal entitlement to this revenue arises. Penalty<br />
interest on unpaid rates is recognised on a time proportionate basis.<br />
Fines constitute both spot fines and summonses. Revenue from spot fines and summonses is recognised<br />
when payment is received, together with an estimate of spot fines and summonses that will<br />
be received based on past experience of amounts collected.<br />
Revenue from public contributions and donations is recognised when all conditions associated with<br />
the contribution have been met or where the contribution is to finance property, plant and equipment,<br />
when such items of property, plant and equipment qualifies for recognition and first becomes<br />
available for use by the municipality. Where public contributions have been received but the municipality<br />
has not met the related conditions, a deferred income (liability) is recognised.<br />
Contributed property, plant and equipment is recognised when such items of property, plant and<br />
equipment qualifies for recognition and become available for use by the municipality.<br />
Revenue from the recovery of unauthorised, irregular, fruitless and wasteful expenditure is based on<br />
legislated procedures, including those set out in the Municipal Finance Management Act (Act No.56<br />
of 2003) and is recognised when the recovery thereof from the responsible councillors or officials<br />
is virtually certain.<br />
11.3 GRANTS, TRANSFERS AND DONATIONS<br />
Grants, transfers and donations received or receivable are recognised when the resources that have<br />
been transferred meet the criteria for recognition as an asset. A corresponding liability is raised to<br />
the extent that the grant, transfer or donation is conditional. The liability is transferred to revenue<br />
as and when the conditions attached to the grant are met. Grants without any conditions attached<br />
are recognised as revenue when the asset is recognised.<br />
12 BORROWING COSTS<br />
Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying<br />
assets are capitalised to the cost of that asset unless it is inappropriate to do so. The municipality<br />
ceases the capitalisation of borrowing costs when substantially all the activities to prepare<br />
the asset for its intended use or sale are complete. It is considered inappropriate to capitalise borrowing<br />
costs where the link between the funds borrowed and the capital asset acquired cannot be<br />
adequately established. Borrowing costs incurred other than on qualifying assets are recognised as<br />
an expense in surplus or deficit when incurred.<br />
13 EMPLOYEE BENEFITS<br />
13.1 SHORT TERM EMPLOYEE BENEFITS<br />
Remuneration to employees is recognised in the Statement of financial performance as the services<br />
are rendered, except for non-accumulating benefits, which are only recognised when the specific<br />
event occurs.<br />
The municipality has opted to treat its provision for leave pay as a provision.<br />
The costs of all short-term employee benefits such as leave pay, are recognised during the period in<br />
which the employee renders the related services. The liability for leave pay is based on the total accrued<br />
leave days at year end and is shown as a provision. The municipality recognised the expected<br />
cost of performance bonuses only when the municipality has a present legal or constructive obligation<br />
to make such payment and a reliable estimate can be made.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 59
13.2 DEFINED CONTRIBUTION PLANS<br />
A defined contribution plan is a plan under which the municipality pays fixed contributions into a<br />
separate entity. The municipality has no legal or constructive obligation to pay further contributions<br />
if the fund does not hold sufficient assets to pay all employees the benefits relating to service in the<br />
current or prior period.<br />
The municipality’s contributions to the defined contribution funds are established in terms of the<br />
rules governing those plans. Contributions are recognised in the Statement of financial performance<br />
in the period in which the service is rendered by the relevant employees. The municipality has not<br />
further payment obligations once the contributions have been paid.<br />
14 IMPAIRMENT OF ASSETS<br />
14.1 IMPAIRMENT OF ASSETS<br />
The municipality assesses at each <strong>report</strong>ing date whether there is any indication that an asset may<br />
be impaired. If any such indication exists, the municipality estimates the recoverable service amount<br />
of the asset.<br />
Irrespective of whether there is any indication of impairment, the municipality also:<br />
- tests intangible assets with an indefinite useful life or intangible assets not yet available for use for<br />
impairment <strong>annual</strong>ly by comparing its carrying amount with its recoverable amount. This impairment<br />
test is performed during the <strong>annual</strong> period and at the same time every period.<br />
If there is any indication that an asset may be impaired, the recoverable service amount is estimated<br />
for the individual asset. If it is not possible to estimate the recoverable service amount of the individual<br />
asset, the recoverable service amount of the cash-generating unit to which the asset belongs<br />
is determined.<br />
The recoverable service amount of an asset or a cash-generating unit is the higher of its fair value<br />
less costs to sell and its value in use.<br />
If the recoverable service amount of an asset is less than its carrying amount, the carrying amount of<br />
the asset is reduced to its recoverable service amount. That reduction is an impairment loss.<br />
An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is<br />
recognised immediately in surplus or deficit. Any impairment loss of a revalued asset is treated as<br />
a revaluation decrease.<br />
An impairment loss is recognised for cash-generating units if the recoverable service amount of the<br />
unit is less than the carrying amount of the unit. The impairment loss is allocated to reduce the carrying<br />
amount of the assets of the unit as follows:<br />
- to the assets of the unit, pro rata on the basis of the carrying amount of each asset in the unit.<br />
A municipality assesses at each <strong>report</strong>ing date whether there is any indication that an impairment<br />
loss recognised in prior periods for assets may no longer exist or may have decreased. If any such<br />
indication exists, the recoverable service amounts of those assets are estimated.<br />
The increased carrying amount of an asset attributable to a reversal of an impairment loss does not<br />
exceed the carrying amount that would have been determined had no impairment loss been recognised<br />
for the asset in prior periods.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 60
A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation<br />
is recognised immediately in surplus or deficit. Any reversal of an impairment loss of a revalued<br />
asset is treated as a revaluation increase.<br />
14.2 TRANSITIONAL PROVISIONS<br />
In terms of Directive 4 the municipality are not required to measure Property, plant and equipment,<br />
Intangible assets and Investment Property for <strong>report</strong>ing periods beginning on or after a date within<br />
three years following the date of initial adoption of the relevant Standard of GRAP. The Standard<br />
of GRAP on Property, Plant and Equipment, Intangible assets and Investment Property was initially<br />
adopted on 1 July 2009.<br />
Due to the fact that the municipality has taken advantage of the transitional provisions, the municipality<br />
have not assess impairment.<br />
15 VALUE ADDED TAX<br />
The <strong>Municipality</strong> accounts for Value Added Tax on the payment basis.<br />
16 TRANSITIONAL PROVISIONS<br />
The <strong>Municipality</strong> has taken advantage of the transitional provisions for Medium and Low Capacity<br />
Municipalities as set out in Directive 4 paragraph .63 to .70 (Investment property), .73 to .83 (Property,<br />
plant and equipment) and .110 to .118 (Intangible assets) issued by the Accounting Standards<br />
Board. This further brings into effect paragraph .94E of Directive 4 which indicates that municipalities<br />
are not required to recognise provisions (which form part of the cost of an asset) in their financial<br />
statements as a result of applying the transitional provisions in other Standards of GRAP and<br />
are required to apply the disclosure requirements about the provisions related to those assets in<br />
accordance with the relevant GRAP standard.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 61
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
for the year ended 30 June <strong>2010</strong><br />
1 CASH AND CASH EQUIVALENTS<br />
Note <strong>2010</strong> 2009<br />
R<br />
R<br />
Cash and cash equivalents consist of the following:<br />
Cash at bank 24 930 850 24 457 632<br />
24 930 850 24 457 632<br />
The <strong>Municipality</strong> has the following bank accounts: -<br />
Current Account (Primary Bank Account)<br />
First National Bank - Cofimvaba Branch: Account Num-<br />
Cash book balance at beginning of year 14 162 708 9 645 101<br />
Cash book balance at end of year 17 485 092 14 162 708<br />
Bank statement balance at beginning of year 15 583 139 18 197 593<br />
Bank statement balance at end of year 17 586 189 15 583 139<br />
Current Account (Other Account)<br />
First National Bank - Cofimvaba Branch: Account Number<br />
62101651398<br />
First National Bank - Cofimvaba Branch: Account Number<br />
62090678320<br />
First National Bank - Cofimvaba Branch: Account Number<br />
62022332316<br />
Cash book balance at beginning of year 10 294 923 7 807 935<br />
Cash book balance at end of year 7 445 758 10 294 923<br />
Bank statement balance at beginning of year 10 695 880 2 410 157<br />
Bank statement balance at end of year 7 680 392 10 695 880<br />
Cash on hand 884 884<br />
Total cash and cash equivalents 24 931 734 24 458 515<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 62
2 CONSUMER DEBTORS<br />
Gross Balances<br />
Provision for<br />
Doubtful Debts<br />
Net Balance<br />
Trade receivables R R R<br />
as at 30 June <strong>2010</strong><br />
Service debtors<br />
Rates 3 777 547 (3 155 745) 621 802<br />
Refuse 624 181 (449 520) 174 661<br />
Other services 496 733 (362 208) 134 525<br />
Total 4 898 461 (3 967 473) 930 988<br />
as at 30 June 2009<br />
Service debtors<br />
Rates 2 363 756 (793 223) 1 215 487<br />
Water 791 041 (223 848) 791 041<br />
Sewerage 95 428 (27 004) 95 428<br />
Refuse 315 101 (104 194) 315 101<br />
Total 3 565 326 (1 148 269) 2 417 057<br />
Rates: Ageing<br />
Current (0 – 30 days) 125 485 78 521<br />
31 - 60 Days 117 616 73 597<br />
61 - 90 Days 108 034 67 601<br />
91 - 120 Days 3 426 412 2 144 037<br />
Total 3 777 547 2 363 756<br />
Electricity, Water, Sewerage and Refuse: Ageing<br />
31 - 60 Days 129 081 97 209<br />
61 - 90 Days 916 116 880 022<br />
91 - 120 Days 75 718 224 339<br />
Total 1 120 915 1 201 570<br />
Reconciliation of the doubtful debt provision<br />
Balance at beginning of the year 1 148 269 3 753 753<br />
Contributions to provision 2 819 204 1 148 269<br />
Doubtful debts written off against provision - (3 753 753)<br />
Balance at end of year 3 967 473 1 148 269<br />
Trade receivables impaired<br />
As of 30 June <strong>2010</strong>, trade receivables of R 2,8 million<br />
(2009: R 1,1 million) were impaired and provided for.<br />
The amount of the provision was R 3,9 million as of 30<br />
June <strong>2010</strong> (2009: R 1,1 million).<br />
The fair value of trade and other receivables approximates<br />
their carrying amounts.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 63
3 TRADE RECEIVABLES FROM EXCHANGE TRANSACTIONS<br />
Trade debtors 309 186 1 201 570<br />
309 186 1 201 570<br />
Credit quality of trade and other receivables<br />
Trade and other receivables consists of:<br />
Trade receivables<br />
Amounts included under trade receivables from exchange<br />
transactions<br />
Amounts included under other receivables from nonexchange<br />
transactions<br />
309 186 1 201 570<br />
621 802 1 215 487<br />
930 988 2 417 057<br />
The following represents information on the credit quality<br />
of trade receivables that are neither past due nor<br />
impaired:<br />
Trade receivables<br />
Counterparties with external credit rating<br />
A (Government accounts) 139 648<br />
B (Businesses) 316 536<br />
C (Domestic and other) 474 804<br />
930 988<br />
Analysis of table:<br />
A - The debtors are of good credit quality and no default<br />
in payment is expected.<br />
B - The debtors are usual good payers, but there is a<br />
possibility that the debtor may not be able to pay on<br />
time.<br />
C - These debtors usually pay, but have previously paid<br />
late and therefore there is a possibility that these debtors<br />
will not be recoverable.<br />
Trade and other receivables past due but not impaired<br />
The ageing of amounts past due but not impaired is as<br />
follows:<br />
Trade receivables 930 988 2 417 057<br />
1-30 days past due - -<br />
31-60 days past due 246 697 170 806<br />
61 - 90 days past due 684 291 2 246 251<br />
930 988 2 417 057<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 64
4<br />
OTHER RECEIVABLES FROM NON-EXCHANGE<br />
TRANSACTIONS<br />
Assessment rate debtors 621 802 1 215 487<br />
621 802 1 215 487<br />
5 OTHER RECEIVABLES FROM EXCHANGE TRANSACTIONS<br />
Other debtors 9 876 467 5 286 093<br />
Total Other Debtors 9 876 467 5 286 093<br />
6 INVESTMENTS<br />
Deposits - -<br />
Call investments 838 775 590 138<br />
Other investments 2 017 918 1 725 136<br />
2 856 693 2 315 274<br />
7 NON CURRENT INVESTMENTS<br />
Financial Instruments<br />
Other investments - 208 995<br />
- 208 995<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 65
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
NOTES TO THE FINANCIAL STATEMENTS<br />
for the year ended 30 June <strong>2010</strong><br />
8<br />
PROPERTY, PLANT AND<br />
EQUIPMENT<br />
8.1<br />
Reconciliation of Carrying<br />
Value<br />
Land Buildings Infrastructure Community Other Assets Total<br />
R R R R R R<br />
as at 1 July 2009<br />
Cost/Revaluation<br />
- -<br />
- -<br />
- - - -<br />
- - - -<br />
Acquisitions 537 739 8 806 125 14 330 964 3 150 214 1 776 088 28 601 130<br />
Capital under Construction<br />
- 2 313 315 719 575 57 046 - 3 089 936<br />
as at 30 June <strong>2010</strong> 537 739 8 806 125 14 330 964 3 150 214 1 776 088 28 601 130<br />
Cost/Revaluation<br />
Accumulated depreciation<br />
and impairment<br />
losses<br />
537 739<br />
8 806 125 14 330 964 3 150 214 1 776 088 28 601 130<br />
- -<br />
- - - -<br />
Refer to Appendix B for more detail on property,<br />
plant and equipment<br />
8.2 Other information<br />
The <strong>Municipality</strong> has<br />
taken advantage of the<br />
transitional provisions<br />
for Medium and Low<br />
Capacity Municipalities<br />
as set out in Directive<br />
4 paragraph .73 to .83<br />
issued by the Accounting<br />
Standards Board.<br />
Municipalities who take<br />
advantage of the transitional<br />
provisions are<br />
not required to measure<br />
property, plant and<br />
equipment for <strong>report</strong>ing<br />
periods beginning on or<br />
after a date within three<br />
years following the date<br />
of initial adoption of<br />
the Standard of GRAP<br />
on Property, Plant and<br />
Equipment.<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 66
APPENDIX A<br />
SCHEDULE OF EXTERNAL LOANS<br />
as at 30 June <strong>2010</strong><br />
EXTERNAL LOANS Loan number Redeemable Date<br />
Balance at 30<br />
June 2009<br />
Received during<br />
the period<br />
Redeemed /<br />
written off during<br />
the period<br />
Balance at 30<br />
June <strong>2010</strong><br />
Carrying Value of<br />
Property, Plant &<br />
Equipment<br />
R R R R R R<br />
Other Costs in<br />
accordance with<br />
MFMA<br />
GOVERNMENT LOANS<br />
- DBSA @ 5% EC102527 30/09/2028 3 872 962 - (226 738) 3 646 224 3 792 927 -<br />
Total Government Loans<br />
TOTAL EXTERNAL LOANS<br />
INTSIKA YETHU LOCAL MUNICIPALITY / 67
Planning by Reviewed Performed by Final review<br />
Client details<br />
Client name: <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Year end: 30 June <strong>2011</strong>
INTSIKA YETHU MUNICIPALITY<br />
Annual Financial Statements<br />
for the year ended 30 June <strong>2011</strong>
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
General Information<br />
Legal form of entity<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Mayoral committee Before 18 May <strong>2011</strong> After 18 May <strong>2011</strong><br />
Executive Mayor Mr SD Plata K Vimbayo<br />
Speaker Mr M Sokujika AZ Mbotholoshi<br />
Chief Wip Mr AZ Mbotholoshi S Myataza<br />
Councillors K Vimbayo Elected Executive Mayor<br />
WN Mdwayingana WN Mdwayingana<br />
N Tshangana<br />
N Tshangana - Nkota<br />
S Myataza<br />
Elected Chief Whip<br />
N Boyana<br />
KF Mdleleni<br />
N Berana<br />
J Cengani<br />
K Ntsaluba<br />
K Ntsaluba<br />
HM Hewu<br />
HM Hewu<br />
N Magaga<br />
N Magaga<br />
N Tsomo<br />
MM Mbebe<br />
MM Mbebe<br />
ML Papiyana<br />
ML Papiyana<br />
Z Qayiya<br />
Z Qayiya<br />
D Kapsile<br />
D Kapsile<br />
NE Stata<br />
NE Stata<br />
P Nqandela<br />
P Nqandela<br />
MN Mkhumbuzi<br />
M Mahali<br />
M Mahali<br />
NS Mafanya<br />
NS Mafanya<br />
LN Ntshanka -<br />
L Mbambiso -<br />
TSN Bizana -<br />
NT Tayitile -<br />
FN Dangazele<br />
FN Dangazele<br />
MN Rigala<br />
M Yamile<br />
M Yamile<br />
N Giyose -<br />
Z Jabanga -<br />
NF Kopman -<br />
M Kolofana -<br />
MG Kuse -<br />
VG Matomela<br />
VG Matomela<br />
B Mboniswa<br />
B Mboniswa<br />
J Mdekazi -<br />
NE Mdlungu -<br />
N Mteli -<br />
MG Ntshinka -<br />
JN Peter -<br />
M Shasha<br />
M Shasha<br />
MT Shugu -<br />
S Tame<br />
S Tame<br />
PN Tukwayo -<br />
V Tyhulu -<br />
M Yotsi -<br />
1
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
General Information<br />
Grading of local authority Grade 2<br />
- N Ntloko<br />
- ZS Matshikiza<br />
- N Bani<br />
- N Jada<br />
- NH Mgodeli<br />
- NA Somdyala<br />
- M Zulu<br />
- HM Nobongoza<br />
- NP Gadeni<br />
- MA Mbotshane<br />
- MI Bititsha<br />
- Z Mxi<br />
- S Mkunyana<br />
- M Gulubela<br />
- AN Rotyi<br />
- N Mto<br />
- NV Hexana<br />
- NG Futiso<br />
Chief Finance Officer (CFO)<br />
Mr M Dyushu<br />
Accounting Officer<br />
Mr Zamuxolo Shasha<br />
Business address Building No. 201<br />
Main Street<br />
Cofimvaba<br />
5380<br />
Postal address Private Bag X 1251<br />
Cofimvaba<br />
5380<br />
Bankers<br />
Auditors<br />
First National Bank<br />
Auditor General of South Africa<br />
2
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Index<br />
The <strong>report</strong>s and statements set out below comprise the <strong>annual</strong> financial statements presented to the provincial legislature:<br />
Index<br />
Page<br />
Accounting Officer's Responsibilities and Approval 4<br />
Audit Committee Report 5 - 6<br />
Accounting Officer's Report 9 - 10<br />
Statement of Financial Position 11<br />
Statement of Financial Performance 12<br />
Statement of Changes in Net Assets 13<br />
Statement of Cash Flows 14<br />
Accounting Policies 15 - 22<br />
Notes to the Annual Financial Statements 23 - 39<br />
Appendixes:<br />
Appendix A: Schedule of External loans 41<br />
Appendix E(1): Actual versus Budget (Revenue and Expenditure) 48<br />
Abbreviations<br />
DBSA<br />
SA GAAP<br />
GRAP<br />
GAMAP<br />
IMFO<br />
MFMA<br />
MIG<br />
Development Bank of South Africa<br />
South African Statements of Generally Accepted Accounting Practice<br />
Generally Recognised Accounting Practice<br />
Generally Accepted Municipal Accounting Practice<br />
Institute of Municipal Finance Officers<br />
Municipal Finance Management Act<br />
Municipal Infrastructure Grant (Previously CMIP)<br />
3
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Officer's Responsibilities and Approval<br />
The accounting officer is required by the Municipal Finance Management Act (Act 56 of 2003), to maintain adequate<br />
accounting records and is responsible for the content and integrity of the <strong>annual</strong> financial statements and related financial<br />
information included in this <strong>report</strong>. It is the responsibility of the accounting officer to ensure that the <strong>annual</strong> financial statements<br />
fairly present the state of affairs of the municipality as at the end of the financial year and the results of its operations and cash<br />
flows for the period then ended. The external auditors are engaged to express an independent opinion on the <strong>annual</strong> financial<br />
statements and was given unrestricted access to all financial records and related data.<br />
The <strong>annual</strong> financial statements have been prepared in accordance with Standards of Generally Recognised Accounting<br />
Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.<br />
The <strong>annual</strong> financial statements are based upon appropriate accounting policies consistently applied and supported by<br />
reasonable and prudent judgements and estimates.<br />
The accounting officer acknowledges that he is ultimately responsible for the system of internal financial control established by<br />
the municipality and place considerable importance on maintaining a strong control environment. To enable the accounting<br />
officer to meet these responsibilities, the accounting officer sets standards for internal control aimed at reducing the risk of<br />
error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly<br />
defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk.<br />
These controls are monitored throughout the municipality and all employees are required to maintain the highest ethical<br />
standards in ensuring the municipality’s business is conducted in a manner that in all reasonable circumstances is above<br />
reproach. The focus of risk management in the municipality is on identifying, assessing, managing and monitoring all known<br />
forms of risk across the municipality. While operating risk cannot be fully eliminated, the municipality endeavours to minimise it<br />
by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within<br />
predetermined procedures and constraints.<br />
The accounting officer is of the opinion, based on the information and explanations given by management, that the system of<br />
internal control provides reasonable assurance that the financial records may be relied on for the preparation of the <strong>annual</strong><br />
financial statements. However, any system of internal financial control can provide only reasonable, and not absolute,<br />
assurance against material misstatement or deficit.<br />
The accounting officer has reviewed the municipality’s cash flow forecast for the year to 30 June 2012 and, in the light of this<br />
review and the current financial position, he is satisfied that the municipality has or has access to adequate resources to<br />
continue in operational existence for the foreseeable future.<br />
The municipality is largely dependent on the grant allocated through the Division of revenue act (Dora) for continued funding of<br />
operations. The <strong>annual</strong> financial statements are prepared on the basis that the municipality is a going concern and that the<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> has neither the intention nor the need to liquidate or curtail materially the scale of the municipality.<br />
Although the accounting officer is primarily responsible for the financial affairs of the municipality, he is supported by the<br />
municipality's Chief Financial Officer.<br />
The Office of the Auditor General is responsible for independently reviewing and <strong>report</strong>ing on the municipality's <strong>annual</strong><br />
financial statements. The <strong>annual</strong> financial statements have been examined by the municipality's external auditors and their<br />
<strong>report</strong> is presented on page 7.<br />
The <strong>annual</strong> financial statements set out on pages 9 to 39, which have been prepared on the going concern basis, were<br />
approved by the on 30 August <strong>2011</strong> and were signed on its behalf by:<br />
Mr Zamuxolo Shasha<br />
Municipal Manager<br />
4
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Audit Committee Report<br />
We are pleased to present our <strong>report</strong> for the financial year ended 30 June <strong>2011</strong>.<br />
Audit committee members and attendance<br />
The audit committee consists of the members listed hereunder and should meet 4 times per annum as per its approved terms<br />
of reference. During the current year 6 number of meetings were held.<br />
Name of member<br />
Number of meetings attended<br />
Mr Abor Yeboah (Chairperson) 6 out of 6<br />
Mrs Tracey Putzier 5 out of 6<br />
Ms Zoleka Madikazi 4 out of 6<br />
Audit committee responsibility<br />
We <strong>report</strong> that we have adopted appropriate formal terms of reference in our charter in line with the requirements of section<br />
38(10)(1) of the PFMA and Treasury Regulation 3.1. We further <strong>report</strong> that we have conducted our affairs in compliance with<br />
this internal audit charter.<br />
The effectiveness of internal control<br />
The system of internal controls applied by the municipality over financial and risk management is effective, efficient and<br />
transparent. In line with the MFMA and the King II Report on Corporate Governance requirements, Internal Audit provides<br />
the Audit Committee and management with assurance that the internal controls are appropriate and effective. This is<br />
achieved by means of the risk management process, as well as the identification of corrective actions and suggested<br />
enhancements to the controls and processes. From the various <strong>report</strong>s of the Internal Auditors, the Audit Report on the<br />
<strong>annual</strong> financial statements, and the management letter of the Auditor-General South Africa, it was noted that no matters<br />
were <strong>report</strong>ed that indicate any material deficiencies in the system of internal control or any deviations there from.<br />
Accordingly, we can <strong>report</strong> that the system of internal control over financial <strong>report</strong>ing for the period under review was<br />
efficient and effective.<br />
The quality of in year management and monthly/quarterly <strong>report</strong>s submitted in terms of the MFMA and the Division of Revenue<br />
Act.<br />
We are satisfied with the content and quality of monthly and quarterly <strong>report</strong>s prepared and issued by the auditors of the<br />
municipality during the year under review.<br />
Evaluation of <strong>annual</strong> financial statements<br />
We have:<br />
<br />
<br />
<br />
<br />
<br />
Reviewed and discussed the audited <strong>annual</strong> financial statements to be included in the <strong>annual</strong> <strong>report</strong>, with the<br />
Auditor-General and the auditors;<br />
Reviewed the Auditor-General of South Africa's management letter and management’s response thereto;<br />
Reviewed changes in accounting policies and practices;<br />
Reviewed the entities compliance with legal and regulatory provisions;<br />
Reviewed significant adjustments resulting from the audit.<br />
We concur with and accept the Auditor-General of South Africa's <strong>report</strong> the <strong>annual</strong> financial statements, and are of the opinion<br />
that the audited <strong>annual</strong> financial statements should be accepted and read together with the <strong>report</strong> of the Auditor-General of<br />
South Africa.<br />
Internal audit<br />
We are satisfied that the internal audit function is operating effectively and that it has addressed the risks pertinent to the<br />
municipality and its audits.<br />
Auditor-General of South Africa<br />
We have met with the Auditor-General of South Africa to ensure that there are no unresolved issues.<br />
Chairperson of the Audit Committee<br />
5
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Audit Committee Report<br />
Date:<br />
6
Report of the Auditor General<br />
To the Provincial Legislature of <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Report on the financial statements<br />
I have audited the accompanying <strong>annual</strong> financial statements of the <strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong> which comprise the statement of<br />
financial position as at 30 June <strong>2011</strong>, statement of financial performance, statement of changes in net assets and cash flow<br />
statement for the year then ended, and a summary of significant accounting policies and other explanatory notes, and the<br />
[directors’ / accounting officer’s / accounting authority’s] <strong>report</strong>, as set out on pages 9 to 39.<br />
Responsibility of the for the <strong>annual</strong> financial statements<br />
The accounting officer is responsible for the preparation and fair presentation of these <strong>annual</strong> financial statements in<br />
accordance with [the applicable <strong>report</strong>ing framework/basis of accounting] [and in the manner required by the [Public Finance<br />
Management Act, 1999 (Act No. 1 of 1999) (PFMA)] [Local Government: Municipal Finance Management Act, 2003 (Act No. 56<br />
of 2003) (MFMA)] [Auditor-General audit circular 1 of 2005] and the [Companies Act, 1973 (Act No. 61 of 1973)] [any applicable<br />
enabling legislation]. This responsibility includes:<br />
designing, implementing and maintaining internal control relevant to the preparation and fair presentation of <strong>annual</strong><br />
financial statements that are free from material misstatement, whether due to fraud or error;<br />
selecting and applying appropriate accounting policies; and<br />
making accounting estimates that are reasonable in the circumstances.<br />
Responsibility of the Auditor-General<br />
As required by [section 188 of the Constitution of the Republic of South Africa, 1996 read with section 4 of the Public Audit Act,<br />
2004 (Act No. 25 of 2004) (PAA)] [and section XX of any applicable legislation], my responsibility is to express an opinion on<br />
these <strong>annual</strong> financial statements based on my audit.<br />
I conducted my audit in accordance with the International Standards on Auditing. Those standards require that I comply with<br />
ethical requirements and plan and perform the audit to obtain reasonable assurance whether the <strong>annual</strong> financial statements<br />
are free from material misstatement.<br />
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the <strong>annual</strong> financial<br />
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material<br />
misstatement of the <strong>annual</strong> financial statements, whether due to fraud or error. In making those risk assessments, the auditor<br />
considers internal control relevant to the entity’s preparation and fair presentation of the <strong>annual</strong> financial statements in order to<br />
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the<br />
effectiveness of the entity’s internal control.<br />
An audit also includes evaluating the:<br />
appropriateness of accounting policies used;<br />
reasonableness of accounting estimates made by management; and<br />
overall presentation of the financial statements.<br />
Paragraph 11 et seq. of the Statement of Generally Recognised Accounting Practice, GRAP 1 Presentation of Financial<br />
Statements requires that financial <strong>report</strong>ing by entities shall provide information on whether resources were obtained and used<br />
in accordance with the legally adopted budget. As the budget <strong>report</strong>ing standard is still in the process of being developed, I<br />
have determined that my audit of any disclosures made by [name of entity] in this respect will be limited to <strong>report</strong>ing on noncompliance<br />
with this disclosure requirement.<br />
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.<br />
Basis of accounting<br />
The entity’s policy is to prepare <strong>annual</strong> financial statements on [the basis of accounting determined by the National Treasury]<br />
[entity-specific basis of accounting] as set out in [accounting policy note ] [note to the financial statements].<br />
7
Report of the Auditor General<br />
In my opinion the <strong>annual</strong> financial statements present fairly, in all material respects, the financial position of <strong>Intsika</strong> <strong>Yethu</strong><br />
<strong>Municipality</strong> as at 30 June <strong>2011</strong> and its financial performance and cash flows for the year then ended, in accordance with<br />
[the applicable <strong>report</strong>ing framework/basis of accounting] [and in the manner required by the PFMA/MFMA (if the entity falls<br />
within the scope of the PFMA/MFMA) and Companies Act, 1973 (if the entity falls within the scope of the Companies Act) or<br />
section xx of the entity’s enabling legislation (if the entity does not fall within the scope of the PFMA/MFMA)].<br />
Without qualifying my audit opinion, I draw attention to the following matter(s):<br />
Auditor General of South Africa<br />
8
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Officers Report<br />
The accounting officer submits his <strong>report</strong> for the year ended 30 June <strong>2011</strong>.<br />
1. Incorporation<br />
The municipality was incorporated on 05 December 2000 and obtained its certificate to commence business on the same day.<br />
2. Review of activities<br />
Main business and operations<br />
The municipality is engaged in municipality and operates principally in South Africa.<br />
The operating results and state of affairs of the municipality are fully set out in the attached <strong>annual</strong> financial statements and<br />
do not in our opinion require any further comment.<br />
3. Going concern<br />
We draw attention to the fact that at 30 June <strong>2011</strong>, the municipality had accumulated surplus of R 66 452 225 and that the<br />
municipality's total liabilities exceed its assets by R 36 074 102.<br />
The <strong>annual</strong> financial statements have been prepared on the basis of accounting policies applicable to a going concern. This<br />
basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of<br />
liabilities, contingent obligations and commitments will occur in the ordinary course of business.<br />
4. Subsequent events<br />
The accounting officer is not aware of any matter or circumstance arising since the end of the financial year.<br />
5. Accounting policies<br />
The <strong>annual</strong> financial statements prepared in accordance with the South African Statements of Generally Accepted Accounting<br />
Practice (GAAP), including any interpretations of such Statements issued by the Accounting Practices Board, and in<br />
accordance with the prescribed Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting<br />
Standards Board as the prescribed framework by National Treasury.<br />
6.<br />
The accounting officer of the municipality during the year and to the date of this <strong>report</strong> is as follows:<br />
Name<br />
Mr Zamuxolo Shasha<br />
Nationality<br />
South African<br />
7. Corporate governance<br />
General<br />
The <strong>Municipality</strong> is committed to business integrity, transparency and professionalism in all its activities. As part of this<br />
commitment, the <strong>Municipality</strong> supports the highest standards of corporate governance and the ongoing development of best<br />
practice.<br />
The municipality confirms and acknowledges its responsibility to total compliance with the Code of Corporate Practices and<br />
Conduct ("the Code") laid out in the King Report on Corporate Governance for South Africa 2002. The <strong>Municipality</strong> discuss the<br />
responsibilities of management in this respect, at Councillors meetings and monitor the municipality's compliance with the code<br />
on a three monthly basis.<br />
The salient features of the municipality's adoption of the Code is outlined below:<br />
9
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Officers Report<br />
Audit and risk committee<br />
In terms of section 166 of the Municipal Finance Management Act, each municipal entity must have an audit committee,<br />
subject to subsection (6).<br />
An audit committee is an independent advisory body which must:<br />
(a) advise the municipal council, the political office-bearers, the accounting officer and the management staff of the<br />
municipality, or the board of directors, the accounting officer and the management staff of the municipal entity.<br />
(b) review the <strong>annual</strong> financial statements to provide the council of the municipality or, in the case of a municipal entity, the<br />
council of the parent municipality and the board of directors of the entity, with an authoritative and credible view of the financial<br />
position of the municipality or municipal entity, its efficiency and effectiveness and its overall level of compliance with this Act,<br />
the <strong>annual</strong> Division of Revenue Act and any other applicable legislation.<br />
Internal audit<br />
The municipality has partailly outsourced its internal audit function to PriceWaterhouseCoopers (PWC) to assist the Municipal<br />
in-house internal audit team. This is in compliance with the Municipal Finance Management Act, 2003.<br />
8. Bankers<br />
First National Bank<br />
Account No. 62022331003<br />
Branch Name: Cofimvaba<br />
9. Auditors<br />
Auditor General of South Africa will continue in office for the next financial period.<br />
10
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Statement of Financial Position<br />
Figures in Rand Notes <strong>2011</strong> <strong>2010</strong><br />
Assets<br />
Cash and cash equivalents 2 9 934 517 24 435 645<br />
Current Assets<br />
Investments 2 405 299 2 399 860<br />
Other receivables from non-exchange transactions 5 11 506 873 4 883 778<br />
Trade receivables from exchange transactions 7 3 863 525 3 967 118<br />
VAT receivable 6 1 390 023 2 211 667<br />
29 100 237 37 898 068<br />
Non-Current Assets<br />
Property, plant and equipment 4 61 638 497 27 280 204<br />
Intangible assets 35 58 037 -<br />
61 696 534 27 280 204<br />
Non-Current Assets 61 696 534 27 280 204<br />
Current Assets 29 100 237 37 898 068<br />
Total Assets 90 796 771 65 178 272<br />
Liabilities<br />
Current Liabilities<br />
Current portion of borrowings 36 349 092 121 795<br />
Trade and other payables from exchange transactions 9 11 517 964 5 768 199<br />
Current Provisions 8 3 134 068 2 197 285<br />
15 001 124 8 087 282<br />
Non-Current Liabilities<br />
Non-Current Borrowing 9 343 428 3 524 429<br />
Non-Current Liabilities 9 343 428 3 524 429<br />
Current Liabilities 15 001 124 8 087 282<br />
Total Liabilities 24 344 552 11 611 711<br />
Assets 90 796 771 65 178 272<br />
Liabilities (24 344 552) (11 611 711)<br />
Net Assets 66 452 219 53 566 561<br />
11
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Statement of Financial Performance<br />
Figures in Rand Notes <strong>2011</strong> <strong>2010</strong><br />
Revenue<br />
Property rates 11 3 402 286 1 617 990<br />
Service charges 12 376 339 1 302 736<br />
Rental of facilities and equipment 427 566 495 686<br />
Fines 113 025 70 910<br />
Licences and Permits 1 256 813 667 617<br />
Government grants & subsidies 13 99 032 765 81 044 468<br />
Receipts 9 720 473 -<br />
Interest - outstanding receivables 522 832 90 896<br />
Interest - external investments 692 938 1 056 695<br />
Other income 14 635 602 550 186<br />
Total Revenue 116 180 639 86 897 184<br />
Expenditure<br />
Personnel 16 (42 290 417) (30 682 830)<br />
Remuneration of councillors 17 (10 877 367) (10 269 293)<br />
Finance costs 20 (4 197) (185 388)<br />
Bad debts 18 (7 062 239) (2 819 204)<br />
Repairs and maintenance (8 422 481) (2 950 807)<br />
Bulk purchases 24 (352 225) (503 651)<br />
Contracted services 22 (218 255) (113 229)<br />
General Expenses 15 (32 962 557) (23 420 352)<br />
Total Expenditure (102 189 738) (70 944 754)<br />
Gain on disposal of assets and liabilities 23 233 87 307<br />
Revenue 116 180 639 86 897 184<br />
Expenditure (102 189 738) (70 944 754)<br />
Other 23 233 87 307<br />
Surplus for the year 14 014 134 16 039 737<br />
12
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Statement of Changes in Net Assets<br />
Figures in Rand<br />
Accumulated<br />
surplus<br />
Total net<br />
assets<br />
Opening balance as previously <strong>report</strong>ed 37 527 060 37 527 060<br />
Adjustments<br />
Prior year adjustments (235) (235)<br />
Balance at 01 July 2009 as restated 37 526 825 37 526 825<br />
Changes in net assets<br />
Surplus for the year 16 039 737 16 039 737<br />
Total changes 53 566 559 53 566 559<br />
Balance at 01 July <strong>2010</strong> 52 438 091 52 438 091<br />
Changes in net assets<br />
Surplus for the year 14 014 134 14 014 134<br />
Total changes 14 014 134 14 014 134<br />
Balance at 30 June <strong>2011</strong> 66 452 225 66 452 225<br />
13
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Statement of Cash Flows<br />
Figures in Rand Notes <strong>2011</strong> <strong>2010</strong><br />
Cash flows from operating activities<br />
Receipts<br />
Cash recieved from ratepayers, government and other 110 828 817 92 702 502<br />
Payments<br />
Cash paid to suppliers and employees (96 448 768) (66 267 944)<br />
Finance costs (4 197) (185 388)<br />
Interest received 556 400 1 147 591<br />
(95 896 565) (65 305 741)<br />
Total receipts 110 828 817 92 702 502<br />
Total payments (95 896 565) (65 305 741)<br />
Net cash flows from operating activities 25 14 932 252 27 396 761<br />
Cash flows from investing activities<br />
Purchase of property, plant and equipment 4 (34 358 293) (27 280 204)<br />
Proceeds from sale of property, plant and equipment 4 23 233 87 307<br />
Purchase of intangible assets 35 (58 037) -<br />
Purchase of an asset (43 846) -<br />
Net cash flows from investing activities (34 436 943) (27 192 897)<br />
Cash flows from financing activities<br />
Repayment of current portion of borrowings 349 092 -<br />
Repayment of Borrowings 5 735 611 (226 738)<br />
Net cash flows from financing activities 6 084 703 (226 738)<br />
Net increase/(decrease) in cash and cash equivalents (14 501 125) (22 874)<br />
Cash and cash equivalents at the beginning of the year 24 435 642 24 458 516<br />
Cash and cash equivalents at the end of the year 2 9 934 517 24 435 642<br />
14
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Policies<br />
1. Presentation of Annual Financial Statements<br />
The <strong>annual</strong> financial statements have been prepared in accordance with the effective Standards of Generally Recognised<br />
Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards<br />
Board, in accordance with Section 122(3) of the Municipal Finance Management Act, (Act No 56 of 2003).<br />
These <strong>annual</strong> financial statements have been prepared on an accrual basis of accounting and are in accordance with historical<br />
cost convention unless specified otherwise. Comparative amounts have been restated retrospectively to the extent possible.<br />
They are presented in South African Rand.<br />
A summary of the significant accounting policies, which have been consistently applied, are disclosed below.<br />
These accounting policies are consistent with the previous period.<br />
1.1 Significant judgements and sources of estimation uncertainty<br />
In preparing the <strong>annual</strong> financial statements, management is required to make estimates and assumptions that affect the<br />
amounts represented in the <strong>annual</strong> financial statements and related disclosures. Use of available information and the<br />
application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates<br />
which may be material to the <strong>annual</strong> financial statements. Significant judgements include:<br />
Allowance for doubtful debts<br />
On debtors an impairment loss is recognised in surplus and deficit when there is objective evidence that it is impaired. The<br />
impairment is measured as the difference between the debtors carrying amount and the present value of estimated future cash<br />
flows discounted at the effective interest rate, computed at initial recognition.<br />
1.2 Investment property<br />
Investment property is property (land or a building - or part of a building - or both) held to earn rentals or for capital appreciation<br />
or both, rather than for:<br />
use in the production or supply of goods or services or for<br />
administrative purposes, or<br />
sale in the ordinary course of operations.<br />
Owner-occupied property is property held for use in the production or supply of goods or services or for administrative<br />
purposes.<br />
Investment property is recognised as an asset when, it is probable that the future economic benefits or service potential that<br />
are associated with the investment property will flow to the municipality, and the cost or fair value of the investment property<br />
can be measured reliably.<br />
Investment property is initially recognised at cost including transaction costs once it meets the definition of investment property.<br />
However, where an investment property was acquired through a non-exchange transaction (i.e. where it acquired the<br />
investment property for no or a nominal value) its cost is its fair value as at the date of acquisition. Transaction costs are<br />
included in the initial measurement.<br />
Where investment property is acquired at no cost or for a nominal cost, its cost is its fair value as at the date of acquisition.<br />
Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of, or service a property. If a<br />
replacement part is recognised in the carrying amount of the investment property, the carrying amount of the replaced part is<br />
derecognised.<br />
Compensation from third parties for investment property that was impaired, lost or given up is recognised in surplus or deficit<br />
when the compensation becomes receivable.<br />
Property interests held under operating leases are classified and accounted for as investment property in the following<br />
circumstances:<br />
When classification is difficult, the criteria used to distinguish investment property from owner-occupied property and from<br />
property held for sale in the ordinary course of business, are as follows:<br />
15
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Policies<br />
1.3 Property, plant and equipment<br />
Property, plant and equipment are tangible non-current assets (including infrastructure assets) that are held for use in the<br />
production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during<br />
more than one period.<br />
The cost of an item of property, plant and equipment is recognised as an asset when:<br />
it is probable that future economic benefits or service potential associated with the item will flow to the<br />
municipality; and<br />
the cost of the item can be measured reliably.<br />
Property, plant and equipment is initially measured at cost.<br />
The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the<br />
location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and<br />
rebates are deducted in arriving at the cost.<br />
Where an asset is acquired at no cost, or for a nominal cost, its cost is its fair value as at date of acquisition.<br />
When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as<br />
separate items (major components) of property, plant and equipment.<br />
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also<br />
included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the<br />
obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories.<br />
The useful lives of items of property, plant and equipment have been assessed as follows:<br />
Item<br />
Average useful life<br />
Infrastructure<br />
Roads and Paving 10 years<br />
Sewerage 15 years<br />
Community<br />
Buildings 30 years<br />
Community Halls 30 years<br />
Libraries 30 years<br />
Others 30 years<br />
Others<br />
Buildings 30 years<br />
Office Equipment 3 - 5 years<br />
Furniture and Fittings 10 years<br />
Bins and Containers 5 - 10 years<br />
Landfill sites 30 years<br />
Computer Equipment 4 years<br />
Items of property, plant and equipment are derecognised when the asset is disposed of or when there are no further economic<br />
benefits or service potential expected from the use of the asset.<br />
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or deficit when<br />
the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is<br />
determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.<br />
16
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Policies<br />
1.3 Property, plant and equipment (continued)<br />
Transitional provision<br />
According to the transitional provision, the municipality is not required to measure property, plant and equipment for <strong>report</strong>ing<br />
periods beginning on or after a date within three years following the date of initial adoption of the Standard of GRAP on<br />
Property, plant and equipment. Property, plant and equipment has accordingly been recognised at provisional amounts, as<br />
disclosed in note 4. The transitional provision expires on 30 June 2012.<br />
Until such time as the measurement period expires and property, plant and equipment is recognised and measured in<br />
accordance with the requirements of the Standard of GRAP on Property, plant and equipment, the municipality need not<br />
comply with the Standards of GRAP on:<br />
Presentation of Financial Statements (GRAP 1),<br />
The Effects of Changes in Foreign Exchange Transactions (GRAP 4),<br />
Leases (GRAP 13),<br />
Segment Reporting (GRAP 18),<br />
Non-current Assets Held for Sale and Discontinued Operations (GRAP 100)<br />
The exemption from applying the measurement requirements of the Standard of GRAP on Property, plant and equipment<br />
implies that any associated presentation and disclosure requirements need not be complied with for property, plant and<br />
equipment not measured in accordance with the requirements of the Standard of GRAP on Property, plant and equipment.<br />
1.4 Intangible assets<br />
An asset is identified as an intangible asset when it:<br />
is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged,<br />
either individually or together with a related contract, assets or liability; or<br />
arises from contractual rights or other legal rights, regardless whether those rights are transferable or separate<br />
from the municipality or from other rights and obligations.<br />
An intangible asset is recognised when:<br />
it is probable that the expected future economic benefits or service potential that are attributable to the asset will<br />
flow to the municipality; and<br />
the cost or fair value of the asset can be measured reliably.<br />
Intangible assets are initially recognised at cost.<br />
An intangible asset acquired at no or nominal cost, the cost shall be its fair value as at the date of acquisition.<br />
Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.<br />
The amortisation period and the amortisation method for intangible assets are reviewed at each <strong>report</strong>ing date.<br />
Reassessing the useful life of an intangible asset with a finite useful life after it was classified as indefinite is an indicator that<br />
the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over<br />
its useful life.<br />
Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as<br />
intangible assets.<br />
Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:<br />
Item<br />
Computer software<br />
Useful life<br />
3 years<br />
17
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Policies<br />
1.5 Leases<br />
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is<br />
classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.<br />
Operating leases - lessor<br />
Under a finance lease, the municipality recognises the lease payments to be received in terms of a lease agreement as an<br />
asset (receivable). The receivable is calculated as the sum of all the minimum lease payments to be received, plus any<br />
unguaranteed residual accruing to the municipality, discounted at the interest arte implicit in the lease. The receivable is<br />
reduced by the capital portion of the lease instalments received, with the interest portion being recognised as interest revenue<br />
on a time proportionate basis. The accounting policies relating to derecognition and impairment of financial instruments are<br />
applied to lease receivables.<br />
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.<br />
Operating leases - lessee<br />
Leases are classified as finance leases where substantially all the risks and rewards associated with ownership of an asset are<br />
transferred to the municipality. Property, plant and equipment or intangible assets subject to finance lease agreements are<br />
initially recognised at the lower of the asset's fair value and the present value of the minimum leases payments. The<br />
corresponding liabilities are initially recognised at the inception of the lease and are measured as the sum of the minimum<br />
lease payments due in the terms of the lease agreement, discounted for the effect of interest. In discounting the lease<br />
payments, the municipality uses the interest rate that exactly discounts the lease payments and unguarenteed residual value to<br />
the fair value of the asset plus any direct costs incurred.<br />
Subsequent to initial recognition, the leased assets are accounted for in accordance with the stated accounting policies<br />
applicable to property, plant, equipment or intangibles. The lease liability is reduced by the leases payments, which are<br />
allocated between the lease finance costs and the capital repayment using the effective interest rate method. Lease finance<br />
costs are expensed when incurred. The accounting policies relating to derecognition of financial instruments are applied to<br />
lease payables. The lease asset is depreciated over the shorter of the asset's useful life or the lease term.<br />
Operating leases are those leases that do not fall within the scope of the above definition. Operating leases rentals are accrued<br />
on a straight-line basis over the term of the relevant lease.<br />
1.6 Employee benefits<br />
Short-term employee benefits<br />
Remuneration to employees is recognised in the Statement of financial performance as the services are rendered, except for<br />
non-accumulatating benefits, which are only recognised when the specific event occurs.<br />
The municility has opted to treat its provision for leave pay as a provision.<br />
The costs of all short-term employee benefits such as leave pay, are recognised during the period in which the employee<br />
renders the related services. The liability for leave pay is based on the total accrued leave days at year end and is shown as a<br />
provision. The municipality recognised the expected cost of performance bonuses only when the municipality has a present<br />
legal or constructive obligation to make such payment and a reliable estimate can be made.<br />
Defined contribution plans<br />
A defined contribution plan is a plan under which the municipality pays fixed contributions into a separate entity. The<br />
municipality has no legal or constructive obligation to pay furthuer contributions if the fund does not hold sufficient assets to<br />
pay all employees the benefits relating to service in the current or prior period.<br />
The municipality's contributions to the defined contribution funds are established in terms of the rules governing those plans.<br />
Contributions are recognised in the Statement of financial performance in the period in which the service is rendered by the<br />
relevant employees, The municipality has not further payment obligations once the contributions have been paid.<br />
18
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Policies<br />
1.7 Provisions and contingencies<br />
Provisions are recognised when the municipality has a present or constructive obligation as a result of past events, it is<br />
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable<br />
estimate of the provision can be made, Provisions are reviewed at <strong>report</strong>ing date and adjusted to reflect the current best<br />
estimate. Where the effect is material, non-current provisions are discounted to their present value using a pre-tax discount<br />
rate that reflects the markers current assessment of the time value of money, adjusted for risks specific to the liability.<br />
The municipality does not recognise a contigent liability or contigent asset. A contigent liability is disclosed unless the<br />
possibility of an outflow of resources embodying economic benefits is remote. A contigent asset is disclosed where an<br />
inflow of economic benefits is probable.<br />
Future events that may affect the amount required to settle an obligation are reflected in the amount of a provision where<br />
there is sufficient objective evidence that they will occur. Gains from the expected disposal of assets are not taken into<br />
account in measuring a provision. Provisions are not recognised for future operating losses. The present obligation under<br />
an onerous contract is recognised and measured as a provision.<br />
A provision for restructuring costs is recognised only when the following criteria over and above the recognition criteris of a<br />
provision have been met:.<br />
a) The municipality has a detailed formal plan for the restructuring identifying at least:<br />
the business or part of a business concerned<br />
the principal locations affected<br />
the location, function and approximate number of employee who will be compensated for terminating their services<br />
the expenditures that will be undertaken; and<br />
when the plan will be implemented<br />
b) The municipality has raised a valid expectation in those affected that it will carry out the restructuring by starting to<br />
implement that plan or announcing its main features to those affected by it.<br />
Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 30.<br />
1.8 Revenue from exchange transactions<br />
Revenue from exchange transactions refers to revenue that accrued to the municipality directly in return for services rendered/<br />
goods sold, the value of which approximates the consideration received or receivable.<br />
Services charges relating to water are based on consumption. Meters are read on a monthly basis and are recognised as<br />
revenue when invoiced. Provisional estimates of consumption are made onthly when meter readings have not been performed.<br />
The provinsional estimates of consumption are recognised as revenue when invoiced. Adjustments to provisional estimates of<br />
consumption are made in the invoicing period in which meters have been read. These adjustments are recognised as revenue<br />
in the invoicing period. The estimates of consumption between meter readings are based on the previous three months<br />
average usage.<br />
Service charges relating to refuse removal are recognised on a monthly basis in arrears by applying the approved tariff to each<br />
property that has improvements.<br />
Service charges from sewerage and sanitation are based on the number of sewerage connections on each development<br />
property using the tariffs approved from Council and are levied monthly.<br />
Revenue from the rental of facilities and equipment is recognised on a straight-line basis over the term of the lease agreement.<br />
Revenue arising fro the application of the approved tariff of charges is recognised when the relevant service is rendered by<br />
applying the relevant gazetted tariff. This includes the issuing of licences and permits.<br />
Revenue from the sale of goods is recognised when substantially all the risks and rewards in those goods is passed to the<br />
consumer.<br />
Revenue arising out of situations where the municipality acts as an agent on behalf of another entity (the principal) is limited to<br />
the amount of any fee or commission payable to the municipality as compensation for executing the agreed services<br />
19
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Policies<br />
1.8 Revenue from exchange transactions (continued)<br />
Measurement<br />
Revenue is measured at the fair value of the consideration received or receivable, net of trade discounts and volume rebates.<br />
Rendering of services<br />
Revenue from non-exchange transactions refers to transactions where the municipality received revenue from another entity<br />
without directly giving approximately equal value in exchange. Revenue from non-exchange transactions is generally<br />
recognised to the extent that the related receipt or receivable qualifies for recognition as an asset and there is no liability to<br />
repay the amount.<br />
Revenue from property rates is recognised when the legal entitlement to this revenue arises. Peanlty interest on unpaid rates is<br />
recognised on a time proportionate basis.<br />
Fines constitute both spot fines and summonses. Revenue from spot fines and summonses is recognised when payment is<br />
received, together with an estimate of spot fines and summonses that will be received based on past experiences of amounts<br />
collected.<br />
Revenue from public contributions and donations is recognised when all conditions associated with the contribution have been<br />
met or where the contribution is to finance property, plant and equipment, when such items of property, plant and equipment<br />
qualifies for recognition and first becomes available for use by the municipality. Where public contributions have been received<br />
but the municipality has not met the related conditions, a deferred income (liability) is recognised.<br />
Contributed property, plant and equipment is recognised when such items of property, plant and equipment qualifies for<br />
recognition and become available for use by the municipality.<br />
Revenue from the recovery of unauthorised, irregular, fruitless and wasterful expenditure is based on legislated procedures,<br />
including those set out in the Municipal Finance Management Act (Act No.56 of 2003) and is recognised when the recovery<br />
thereof from the responsible councillors or officials is virtually certain.<br />
Interest<br />
Interest revenue is recognised on a time proportion basis.<br />
1.9 Revenue from non-exchange transactions<br />
Revenue comprises gross inflows of economic benefits or service potential received and receivable by an municipality, which<br />
represents an increase in net assets, other than increases relating to contributions from owners.<br />
Conditions on transferred assets are stipulations that specify that the future economic benefits or service potential embodied in<br />
the asset is required to be consumed by the recipient as specified or future economic benefits or service potential must be<br />
returned to the transferor.<br />
Control of an asset arise when the municipality can use or otherwise benefit from the asset in pursuit of its objectives and can<br />
exclude or otherwise regulate the access of others to that benefit.<br />
Exchange transactions are transactions in which one entity receives assets or services, or has liabilities extinguished, and<br />
directly gives approximately equal value (primarily in the form of cash, goods, services, or use of assets) to another entity in<br />
exchange.<br />
Expenses paid through the tax system are amounts that are available to beneficiaries regardless of whether or not they pay<br />
taxes.<br />
Fines are economic benefits or service potential received or receivable by entities, as determined by a court or other law<br />
enforcement body, as a consequence of the breach of laws or regulations.<br />
20
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Policies<br />
1.9 Revenue from non-exchange transactions (continued)<br />
Non-exchange transactions are transactions that are not exchange transactions. In a non-exchange transaction, an<br />
municipality either receives value from another municipality without directly giving approximately equal value in exchange, or<br />
gives value to another municipality without directly receiving approximately equal value in exchange.<br />
Restrictions on transferred assets are stipulations that limit or direct the purposes for which a transferred asset may be used,<br />
but do not specify that future economic benefits or service potential is required to be returned to the transferor if not deployed<br />
as specified.<br />
Stipulations on transferred assets are terms in laws or regulation, or a binding arrangement, imposed upon the use of a<br />
transferred asset by entities external to the <strong>report</strong>ing municipality.<br />
Tax expenditures are preferential provisions of the tax law that provide certain taxpayers with concessions that are not available<br />
to others.<br />
The taxable event is the event that the government, legislature or other authority has determined will be subject to taxation.<br />
Taxes are economic benefits or service potential compulsorily paid or payable to entities, in accordance with laws and or<br />
regulations, established to provide revenue to government. Taxes do not include fines or other penalties imposed for breaches<br />
of the law.<br />
Transfers are inflows of future economic benefits or service potential from non-exchange transactions, other than taxes.<br />
Recognition<br />
An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent<br />
that a liability is also recognised in respect of the same inflow.<br />
As the municipality satisfies a present obligation recognised as a liability in respect of an inflow of resources from a nonexchange<br />
transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an<br />
amount of revenue equal to that reduction.<br />
Measurement<br />
Revenue from a non-exchange transaction is measured at the amount of the increase in net assets recognised by the<br />
municipality.<br />
When, as a result of a non-exchange transaction, the municipality recognises an asset, it also recognises revenue equivalent<br />
to the amount of the asset measured at its fair value as at the date of acquisition, unless it is also required to recognise a<br />
liability. Where a liability is required to be recognised it will be measured as the best estimate of the amount required to settle<br />
the obligation at the <strong>report</strong>ing date, and the amount of the increase in net assets, if any, recognised as revenue. When a<br />
liability is subsequently reduced, because the taxable event occurs or a condition is satisfied, the amount of the reduction in the<br />
liability is recognised as revenue.<br />
Fines<br />
Fines are recognised as revenue when the receivable meets the definition of an asset and satisfies the criteria for recognition<br />
as an asset.<br />
Assets arising from fines are measured at the best estimate of the inflow of resources to the municipality.<br />
Where the municipality collects fines in the capacity of an agent, the fine will not be revenue of the collecting entity.<br />
Grants, Transfers and Donations<br />
Grants, transferes and donations received or receivable are recognised when the resources that have been transferred meet<br />
the criteria for recognition as an asset. A corresponding liability is raised to the extent that the grant, transfer or donation is<br />
conditional. The liability is transferred to revenue as and when the conditions attached to the grant are met. Grants without any<br />
conditions attached are recognised as revenue when the asset is recognised.<br />
21
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Accounting Policies<br />
1.10 Investment income<br />
Investment income is recognised on a time-proportion basis using the effective interest method.<br />
1.11 Borrowing costs<br />
Borrowing costs that are directly attributed to the acquisition, construction or production of qualifying assets are capitalised<br />
to the cost of that asset unless it is inappropriate to do so. The municipality ceases the capitalisation of borrowing costs<br />
when substantially all the activities to prepare the asset for its intended use or sale are complete. It is considered<br />
inappropriate to capitalise borrowing costs where the link between the funds borrowed and the capital asset acquired<br />
cannot be adequately establised. Borrowing costs incurred other than on qualifying asets are recognised as an expense in<br />
surplus or deficit when incurred.<br />
1.12 Unauthorised expenditure<br />
Unauthorised expenditure means:<br />
overspending of a vote or a main division within a vote; and<br />
expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with<br />
the purpose of the main division.<br />
All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of financial performance in<br />
the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the expense, and<br />
where recovered, it is subsequently accounted for as revenue in the statement of financial performance.<br />
1.13 Fruitless and wasteful expenditure<br />
Fruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been<br />
exercised.<br />
All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of financial<br />
performance in the year that the expenditure was incurred. The expenditure is classified in accordance with the nature of the<br />
expense, and where recovered, it is subsequently accounted for as revenue in the statement of financial performance.<br />
1.14 Irregular expenditure<br />
(a) this Act; or<br />
(b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or<br />
(c) any provincial legislation providing for procurement procedures in that provincial government.<br />
Irregular expenditure is expenditure that is contrar to the Municipal Finance Management Act (Act No. 56 of 2003), the<br />
<strong>Municipality</strong> Systems Act (Act No. 32 of 2000), the Public Office Bearers Act (Act No. 20 of 1998) or is in contravention of the<br />
<strong>Municipality</strong>'s supply chain management policy. Irregular expenditure excludes unauthorised expenditure. Irregular expenditure<br />
is accounted for as expenditure in the Statement of Financial Performance and where recovered, it is subsequently accounted<br />
for as revenue in the Statement of Financial Performance.<br />
1.15 Investments<br />
Where the carrying amount of an investment is greater than the estimated recoverable amount, it is written down immediately<br />
to its recoverable amount and an impairment loss is charged to the statement of financial performance.<br />
22
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
2. Cash and cash equivalents<br />
Cash and cash equivalents consist of:<br />
Cash on hand 4 259 884<br />
Bank balances 9 930 258 24 434 761<br />
3. New standards and interpretations<br />
3.1 Standards and interpretations effective and adopted in the current year<br />
9 934 517 24 435 642<br />
In the current year, the municipality has adopted the following standards and interpretations that are effective for the current<br />
financial year and that are relevant to its operations:<br />
GRAP 23: Revenue from Non-exchange Transactions<br />
Revenue from non-exchange transactions arises when an entity receives value from another entity without directly giving<br />
approximately equal value in exchange. An asset acquired through a non-exchange transaction shall initially be measured<br />
at its fair value as at the date of acquisition.<br />
This revenue will be measured at the amount of increase in net assets recognised by the municipality.<br />
An inflow of resources from a non-exchange transaction recognised as an asset shall be recognised as revenue, except to<br />
the extent that a liability is recognised for the same inflow. As an entity satisfies a present obligation recognised as a liability<br />
in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it will reduce the carrying<br />
amount of the liability recognised as recognise an amount equal to that reduction.<br />
This Standard has been approved by the Board but its effective date has not yet been determined by the Minister of<br />
Finance. The effective date indicated is a provisional date and could change depending on the decision of the Minister of<br />
Finance.<br />
The effective date of the standard is for years beginning on or after 01 April <strong>2010</strong>.<br />
The municipality has adopted the standard for the first time in the <strong>2011</strong> <strong>annual</strong> financial statements.<br />
The impact of the standard is not material.<br />
3.2 Standards and interpretations issued, but not yet effective<br />
The municipality has not applied the following standards and interpretations, which have been published and are mandatory<br />
for the municipality’s accounting periods beginning on or after 01 July <strong>2011</strong> or later periods:<br />
GRAP 25: Employee benefits<br />
The objective of GRAP25 is to prescribe the accounting and disclosure for employee benefits. The Standard requires an<br />
municipality to recognise:<br />
a liability when an employee has provided service in exchange for employee benefits to be paid in the future; and<br />
an expense when an municipality consumes the economic benefits or service potential arising from service<br />
provided by an employee in exchange for employee benefits.<br />
GRAP25 must be applied by an employer in accounting for all employee benefits, except share based payment<br />
transactions.<br />
GRAP25 defines, amongst others, the following:<br />
Employee benefits as all forms of consideration given by an municipality in exchange for service rendered by<br />
employees;<br />
Defined contribution plans as post-employment benefit plans under which an municipality pays fixed<br />
contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further<br />
contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service<br />
in the current and prior periods;<br />
23
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
3. New standards and interpretations (continued)<br />
Defined benefit plans as post-employment benefit plans other than defined contribution plans;<br />
Multi-employer plans as defined contribution plans (other than state plans and composite social security<br />
programmes) or defined benefit plans (other than state plans) that:<br />
- pool the assets contributed by various entities that are not under common control; and<br />
- use those assets to provide benefits to employees of more than one entity, on the basis that contribution<br />
and benefit levels are determined without regard to the identity of the municipality that employs the employees<br />
concerned;<br />
Other long-term employee benefits as employee benefits (other than post-employment benefits and termination<br />
benefits) that is not due to be settled within twelve months after the end of the period in which the employees<br />
render the related service;<br />
Post-employment benefits as employee benefits (other than termination benefits) which are payable after the<br />
completion of employment;<br />
Post-employment benefit plans as formal or informal arrangements under which an municipality provides postemployment<br />
benefits for one or more employees;<br />
Short-term employee benefits as employee benefits (other than termination benefits) that are due to be settled<br />
within twelve months after the end of the period in which the employees render the related service;<br />
State plans as plans other than composite social security programmes established by legislation which operate<br />
as if they are multi-employer plans for all entities in economic categories laid down in legislation;<br />
Termination benefits as employee benefits payable as a result of either:<br />
- an entity’s decision to terminate an employee’s employment before the normal retirement date; or<br />
- an employee’s decision to accept voluntary redundancy in exchange for those benefits;<br />
Vested employee benefits as employee benefits that are not conditional on future employment.<br />
Short-term employee benefits;<br />
- All short-term employee benefits;<br />
- Short-term compensated absences;<br />
- Bonus, incentive and performance related payments;<br />
Post-employment benefits: Defined contribution plans;<br />
Other long-term employee benefits;<br />
Termination benefits.<br />
The effective date of the standard is for years beginning on or after 01 April <strong>2011</strong>.<br />
The municipality has early adopted the standard for the first time in the <strong>2011</strong> <strong>annual</strong> financial statements.<br />
The impact of the standard is set out in note Changes in Accounting Policy.<br />
GRAP 104: Financial Instruments<br />
The standard prescribes recognition, measurement, presentation and disclosure requirements for financial instruments.<br />
Financial instruments are defined as those contracts that results in a financial asset in one municipality and a financial<br />
liability or residual interest in another municipality. A key distinguishing factor between financial assets and financial<br />
liabilities and other assets and liabilities, is that they are settled in cash or by exchanging financial instruments rather than<br />
through the provision of goods or services.<br />
One of the key considerations in initially recognising financial instruments is the distinction, by the issuers of those<br />
instruments, between financial assets, financial liabilities and residual interests. Financial assets and financial liabilities are<br />
distinguished from residual interests because they involve a contractual right or obligation to receive or pay cash or another<br />
financial instrument. Residual interests entitle an municipality to a portion of another municipality’s net assets in the event of<br />
liquidation and, to dividends or similar distributions paid at management’s discretion.<br />
In determining whether a financial instrument is a financial asset, financial liability or a residual interest, an municipality<br />
considers the substance of the contract and not just the legal form.<br />
Where a single instrument contains both a liability and a residual interest component, the issuer allocates the instrument<br />
into its component parts. The issuer recognises the liability component at its fair value and recognises the residual interest<br />
as the difference between the carrying amount of the instrument and the fair value of the liability component. No gain or<br />
loss is recognised by separating the instrument into its component parts.<br />
Financial assets and financial liabilities are initially recognised at fair value. Where an municipality subsequently measures<br />
financial assets and financial liabilities at amortised cost or cost, transactions costs are included in the cost of the asset or<br />
liability.<br />
24
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
3. New standards and interpretations (continued)<br />
The transaction price usually equals the fair value at initial recognition, except in certain circumstances, for example, where<br />
interest free credit is granted or where credit is granted at a below market rate of interest.<br />
Concessionary loans are loans either received by or granted to another municipality on concessionary terms, e.g. at low<br />
interest rates and flexible repayment terms. On initial recognition, the fair value of a concessionary loan is the present value<br />
of the agreed contractual cash flows, discounted using a market related rate of interest for a similar transaction. The<br />
difference between the proceeds either received or paid and the present value of the contractual cash flows is accounted<br />
for as non-exchange revenue by the recipient of a concessionary loan in accordance with Standard of GRAP on Revenue<br />
from Non-exchange Revenue Transactions (Taxes and Transfers), and using the Framework for the Preparation and<br />
Presentation of Financial Statements (usually as an expense) by the grantor of the loan.<br />
Financial assets and financial liabilities are subsequently measured either at fair value or, amortised cost or cost. An<br />
municipality measures a financial instrument at fair value if it is:<br />
a derivative;<br />
a combined instrument designated at fair value, i.e. an instrument that includes a derivative and a non-derivative<br />
host contract;<br />
held-for-trading;<br />
a non-derivative instrument with fixed or determinable payments that is designated at initial recognition to be<br />
measured at fair value;<br />
an investment in a residual interest for which fair value can be measured reliably; and<br />
other instruments that do not meet the definition of financial instruments at amortised cost or cost.<br />
Derivatives are measured at fair value. Combined instruments that include a derivative and non-derivative host contract are<br />
accounted for as follows:<br />
Where an embedded derivative is included in a host contract which is a financial instrument within the scope of<br />
this Standard, an entity can designate the entire contract to be measured at fair value or, it can account for the<br />
host contract and embedded derivative separately using GRAP 104. An municipality is however required to<br />
measure the entire instrument at fair value if the fair value of the derivative cannot be measured reliably.<br />
Where the host contract is not a financial instrument within the scope of this Standard, the host contract and<br />
embedded derivative are accounted for separately using GRAP 104 and the relevant Standard of GRAP.<br />
Financial assets and financial liabilities that are non-derivative instruments with fixed or determinable payments, for<br />
example deposits with banks, receivables and payables, are measured at amortised cost. At initial recognition, an<br />
municipality can however designate such an instrument to be measured at fair value.<br />
An municipality can only measure investments in residual interests at cost where the fair value of the interest cannot be<br />
determined reliably.<br />
Once an municipality has classified a financial asset or a financial liability either at fair value or amortised cost or cost, it is<br />
only allowed to reclassify such instruments in limited instances.<br />
An entity derecognises a financial asset, or the specifically identified cash flows of an asset, when:<br />
the cash flows from the asset expire, are settled or waived;<br />
significant risks and rewards are transferred to another party; or<br />
despite having retained significant risks and rewards, an municipality has transferred control of the asset to<br />
another municipality.<br />
An municipality derecognises a financial liability when the obligation is extinguished. Exchanges of debt instruments<br />
between a borrower and a lender are treated as the extinguishment of an existing liability and the recognition of a new<br />
financial liability. Where an municipality modifies the term of an existing financial liability, it is also treated as the<br />
extinguishment of an existing liability and the recognition of a new liability.<br />
An municipality cannot offset financial assets and financial liabilities in the statement of financial position unless a legal right<br />
of set-off exists, and the parties intend to settle on a net basis.<br />
GRAP 104 requires extensive disclosures on the significance of financial instruments for an municipality’s statement of<br />
financial position and statement of financial performance, as well as the nature and extent of the risks that an municipality is<br />
exposed to as a result of its <strong>annual</strong> financial statements. Some disclosures, for example the disclosure of fair values for<br />
instruments measured at amortised cost or cost and the preparation of a sensitivity analysis, are encouraged rather than<br />
required.<br />
25
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
3. New standards and interpretations (continued)<br />
GRAP 104 does not prescribe principles for hedge accounting. An municipality is permitted to apply hedge accounting, as<br />
long as the principles in IAS 39 are applied.<br />
This Standard has been approved by the Board but its effective date has not yet been determined by the Minister of<br />
Finance. The effective date indicated is a provisional date and could change depending on the decision of the Minister of<br />
Finance.<br />
The effective date of the standard is for years beginning on or after 01 April <strong>2011</strong>.<br />
The municipality expects to adopt the standard for the first time in the 2012 <strong>annual</strong> financial statements.<br />
It is unlikely that the amendment will have a material impact on the municipality's <strong>annual</strong> financial statements.<br />
4. Property, plant and equipment<br />
Cost /<br />
Valuation<br />
<strong>2011</strong> <strong>2010</strong><br />
Accumulated Carrying value Cost /<br />
depreciation<br />
Valuation<br />
and<br />
accumulated<br />
impairment<br />
Accumulated Carrying value<br />
depreciation<br />
and<br />
accumulated<br />
impairment<br />
Land 537 739 - 537 739 537 739 - 537 739<br />
Buildings 11 145 324 - 11 145 324 8 365 712 - 8 365 712<br />
Motor vehicles 1 289 749 - 1 289 749 - - -<br />
Office equipment 926 267 - 926 267 - - -<br />
IT equipment 185 299 - 185 299 - - -<br />
Infrastructure 39 423 816 - 39 423 816 13 396 091 - 13 396 091<br />
Community 8 130 303 - 8 130 303 3 150 214 - 3 150 214<br />
Other property, plant and<br />
equipment<br />
- - - 1 830 448 - 1 830 448<br />
Total 61 638 497 - 61 638 497 27 280 204 - 27 280 204<br />
Reconciliation of property, plant and equipment - <strong>2011</strong><br />
Opening Additions Total<br />
balance<br />
Land 537 739 - 537 739<br />
Buildings 8 365 712 2 779 612 11 145 324<br />
Motor vehicles - 1 289 749 1 289 749<br />
Office equipment - 926 267 926 267<br />
IT equipment - 185 299 185 299<br />
Infrastructure 13 396 091 26 027 725 39 423 816<br />
Community 3 150 214 4 980 089 8 130 303<br />
Other property, plant and equipment 1 830 448 (1 830 448) -<br />
27 280 204 34 358 293 61 638 497<br />
26
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
4. Property, plant and equipment (continued)<br />
Reconciliation of property, plant and equipment - <strong>2010</strong><br />
Opening Additions Total<br />
balance<br />
Land - 537 739 537 739<br />
Buildings - 8 365 712 8 365 712<br />
Infrastructure - 13 396 091 13 396 091<br />
Community - 3 150 214 3 150 214<br />
Other property, plant and equipment - 1 830 448 1 830 448<br />
Borrowing costs capitalised<br />
- 27 280 204 27 280 204<br />
Infrastructure 120 256 -<br />
The <strong>Municipality</strong> has taken advantage of the transitional provisions for Medium and Low Capacity Municipalities as set out in<br />
Directive 4 paragraph .73 to.83 issued by the Accounting Standards Board. Municipalities who take advantage of the<br />
transitional provisions are not required to measure property, plant and equipment for <strong>report</strong>ing periods beginning on or after a<br />
date within three years following the date of initial adoption of the Standard of GRAP on Property, Plant and Equipment.<br />
5. Other receivables from non-exchange transactions<br />
Trade debtors (4 442 794) 4 098 216<br />
Employee costs in advance - 785 562<br />
Deposits 15 949 667 -<br />
6. Value Added Tax Receivable<br />
11 506 873 4 883 778<br />
Value Added Tax 1 390 023 2 211 667<br />
7. Trade and Other Receivables from Exchange Transactions<br />
Gross balances<br />
Rates 1 208 370 4 103 001<br />
Water 1 464 932 1 464 932<br />
Sewerage 280 004 280 004<br />
Refuse 408 366 624 182<br />
Housing rental 502 453 -<br />
Other (specify) (600) 1 462 472<br />
3 863 525 7 934 591<br />
Less: Provision for debt impairment<br />
Other (specify) (3 406 059) (3 967 473)<br />
Net balance<br />
Rates 1 208 370 4 103 001<br />
Water 1 464 932 1 464 932<br />
Sewerage 280 004 280 004<br />
Refuse 408 366 624 182<br />
Housing rental 502 453 -<br />
Other (specify) (600) (2 505 001)<br />
3 863 525 3 967 118<br />
27
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
7. Trade and Other Receivables from Exchange Transactions (continued)<br />
Rates<br />
Current (0 -30 days) (2 792 270) 125 485<br />
31 - 60 days 288 131 117 616<br />
61 - 90 days 120 500 108 034<br />
91 - 120 days 3 338 073 3 426 412<br />
954 434 3 777 547<br />
Refuse and Sewerage: Ageing<br />
Current (0 -30 days) 186 216 336 313<br />
31 - 60 days 31 806 3 044 592<br />
61 - 90 days 29 487 776 140<br />
91 - 120 days 572 835 -<br />
820 344 4 157 045<br />
Rental: Ageing<br />
Current (0 -30 days) 330 391 -<br />
31 - 60 days 32 213 -<br />
61 - 90 days 32 213 -<br />
91 - 120 days 40 490 -<br />
Summary of debtors by customer classification<br />
435 307 -<br />
Less: Provision for debt impairment<br />
Balance at beginning of the year - (1 148 269)<br />
Contributions to provision (3 406 059) (2 819 204)<br />
(3 406 059) (3 967 473)<br />
Reconciliation of debt impairment provision<br />
Contributions to provision (3 406 059) (3 967 473)<br />
8. Provisions<br />
Reconciliation of provisions - <strong>2011</strong><br />
Opening Additions Total<br />
Balance<br />
Leave Provision 2 197 285 727 508 2 924 793<br />
Landfill site - 209 275 209 275<br />
Legal proceedings provisions<br />
2 197 285 936 783 3 134 068<br />
A brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits or<br />
service potential.<br />
An indication of the uncertainties about the amount or timing of those outflows. Where necessary to provide adequate<br />
information, an entity shall disclose the major assumptions made concerning future events, as addressed in paragraph .61.<br />
The amount of any expected reimbursement, stating the amount of any asset that has been recognised for that expected<br />
reimbursement.<br />
28
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
9. Trade and other payables from exchange transactions<br />
Trade payables 11 517 964 5 768 199<br />
10. Revenue<br />
Property rates 3 402 286 1 617 990<br />
Service charges 376 339 1 302 736<br />
Rental of facilities & equipment 427 566 495 686<br />
Income from agency services 113 025 70 910<br />
Fines 1 256 813 667 617<br />
Government grants & subsidies 99 032 765 81 044 468<br />
Receipts - CHDM (WSP) 9 720 473 -<br />
Interest earned - outstanding debtors 522 832 90 896<br />
Interest earned - external investments 692 938 1 056 695<br />
115 545 037 86 346 998<br />
The amount included in revenue arising from exchanges of goods or services<br />
are as follows:<br />
Service charges 376 339 1 302 736<br />
Rental of facilities & equipment 427 566 495 686<br />
Income from agency services 113 025 70 910<br />
Receipts 9 720 473 -<br />
10 637 403 1 869 332<br />
The amount included in revenue arising from non-exchange transactions is as<br />
follows:<br />
Taxation revenue<br />
Property rates 3 402 286 1 617 990<br />
Fines 1 256 813 667 617<br />
Transfer revenue<br />
Grants and Subsidies Received 99 032 765 81 044 468<br />
Interest earned - outstanding receivables 522 832 90 896<br />
Interest earned - external investments 692 938 1 056 695<br />
11. Property rates<br />
Rates received<br />
104 907 634 84 477 666<br />
Rates and taxes 3 402 286 1 617 990<br />
12. Service charges<br />
Refuse removal 376 339 459 713<br />
Sale of water - 843 023<br />
376 339 1 302 736<br />
29
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
13. Government grants and subsidies<br />
Equitable share 69 276 411 56 857 916<br />
MIG 17 564 000 17 032 518<br />
MSIG 750 000 500 000<br />
FMG 1 250 000 1 000 000<br />
LG-SETA 154 077 -<br />
CHDM Grant 5 705 049 4 828 898<br />
Mass-FP LED 2 703 228 736 408<br />
Local Government (IEC) 1 630 000 -<br />
EPWP Grant - 161 100<br />
99 032 765 81 116 840<br />
Equitable share 69 276 411 56 857 916<br />
MIG Grant 17 564 000 17 032 518<br />
MSIG Grant 750 000 500 000<br />
FMG 1 250 000 1 000 000<br />
Local Government Grants (IEC Projects) 1 630 000 -<br />
Chris Hani DM Grants 5 705 049 4 828 898<br />
LED Grants 2 703 228 736 408<br />
LG Seta 154 077 -<br />
Equitable Share<br />
99 032 765 81 116 840<br />
Current-year receipts 69 276 411 56 857 916<br />
No conditions as per DORA (69 276 411) (56 857 916)<br />
MIG Grant<br />
- -<br />
Current-year receipts 17 564 000 17 032 518<br />
Conditions met - transferred to revenue (17 564 000) (17 032 518)<br />
MSIG Grant<br />
- -<br />
Current-year receipts 750 000 500 000<br />
Conditions met - transferred to revenue (750 000) (500 000)<br />
FMG Grant<br />
- -<br />
Current-year receipts 1 250 000 1 000 000<br />
Conditions met - transferred to revenue (1 250 000) (1 000 000)<br />
Local Government Grant (St Marks and IEC Grant)<br />
- -<br />
Current-year receipts 1 630 000 -<br />
Conditions met - transferred to revenue (1 630 000) -<br />
Chris Hani District <strong>Municipality</strong> Grant<br />
- -<br />
30
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
13. Government grants and subsidies (continued)<br />
Current-year receipts 5 705 049 4 828 898<br />
Conditions met - transferred to revenue (5 705 049) (4 828 898)<br />
Local Economic Development (LED) Grant<br />
- -<br />
Current-year receipts 2 703 228 736 408<br />
Conditions met - transferred to revenue (2 703 228) (736 408)<br />
EPWP Grant<br />
- -<br />
Current-year receipts - 161 100<br />
Conditions met - transferred to revenue - (161 100)<br />
Changes in level of government grants<br />
Based on the allocations set out in the Division of Revenue Act, (Act 1 of <strong>2010</strong>), no significant changes in the level of<br />
government grant funding are expected over the forthcoming 3 financial years.<br />
14. Other income<br />
- -<br />
Cemetry 6 842 5 000<br />
Agency fees - 270 368<br />
Service charges 14 255 7 806<br />
Pound Fees 106 090 100 500<br />
Pound Auction Charges 349 791 54 556<br />
Toilet fees 50 666 22 451<br />
Sports field 8 904 581<br />
Tender receipts 74 549 88 924<br />
Business Licences 4 120 -<br />
Other income - Political Party 12 203 -<br />
Equipment here 3 435 -<br />
Chair hire 4 747 -<br />
635 602 550 186<br />
31
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
15. General expenses<br />
Advertising 224 722 165 362<br />
Auditors remuneration 1 371 936 1 276 749<br />
Bank charges 208 149 184 242<br />
Cleaning 156 546 14 158<br />
Consulting and professional fees 3 622 137 615 397<br />
Legal expenses 1 106 239 1 242 276<br />
Conferences and delegations 648 578 149 179<br />
Entertainment 8 708 134 950<br />
Insurance 723 929 253 555<br />
Lease rentals on operating lease 121 975 325 032<br />
Levies 617 798 23 193<br />
Subscription and publication 53 618 1 060<br />
Fuel and oil 1 244 848 1 153 367<br />
Postage and courier 3 537 5 114<br />
Printing and stationery 435 115 364 662<br />
Telephone and fax 1 404 098 1 012 444<br />
Training 1 053 054 1 158 016<br />
Travel - local 27 830 55 601<br />
Uniforms and overalls 247 830 124 445<br />
Membership fees 39 637 154<br />
Other rentals 323 083 286 810<br />
Stocks and material 35 692 68 324<br />
Other expenses 19 283 498 14 806 262<br />
32 962 557 23 420 352<br />
32
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
16. Employee related costs<br />
Employee related costs - Salaries and Wages 24 777 110 20 610 713<br />
Performance and other Bonuses 1 433 672 1 165 939<br />
Employee related costs - Contributions for UIF, Pensions and Medical aids 2 399 219 1 487 522<br />
UIF 22 487 -<br />
SDL 285 591 218 449<br />
Other payroll levies 69 650 8 051<br />
Leave pay provision charge 909 199 119 155<br />
Post-employment benefits - Pension - Defined contribution plan 3 526 128 2 875 009<br />
Travel, motor car, accommodation, subsistence and other allowances 535 910 -<br />
Overtime payments 967 863 384 141<br />
Acting allowances 2 618 599 367 440<br />
Car allowance 1 341 254 1 601 572<br />
Housing benefits and allowances 24 468 326 756<br />
Night shift allowance 322 097 1 122 481<br />
Cell phone allowance 310 390 395 602<br />
Payments for Casual Workers 2 746 780 -<br />
Remuneration of municipal manager<br />
42 290 417 30 682 830<br />
Annual Remuneration 596 202 497 083<br />
Performance Bonuses 68 687 43 512<br />
Travel,motor car, accommodation, subsistence and other allowances 192 880 244 881<br />
Remuneration of Chief Finance Officer<br />
857 769 785 476<br />
Annual Remuneration 475 457 365 841<br />
Performance Bonuses 43 283 -<br />
Travel,motor car, accommodation, subsistence and other allowances 173 386 234 523<br />
Remuneration of Community Services Director<br />
692 126 600 364<br />
Annual Remuneration 536 714 495 646<br />
Performance Bonus 43 283 27 979<br />
Travel,motor car, accommodation, subsistence and other allowances 139 604 127 017<br />
Remuneration of Corporate Service Director<br />
719 601 650 642<br />
Annual Remuneration 536 714 495 647<br />
Performance Bonuses 43 283 39 170<br />
Travel,motor car, accommodation, subsistence and other allowances 146 868 135 929<br />
Remuneration of Technical Service Director<br />
726 865 670 746<br />
Annual Remuneration 536 714 495 647<br />
Performance Bonuses 43 283 27 979<br />
Travel,motor car, accommodation, subsistence and other allowances 180 475 160 081<br />
Remuneration for Local Economic Development Director<br />
33<br />
760 472 683 707
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
16. Employee related costs (continued)<br />
Annual Remuneration 503 169 386 459<br />
Performance Bonuses 45 541 -<br />
Travel,motor car, accommodation, subsistence and other allowances 195 661 148 371<br />
17. Remuneration of councillors<br />
744 371 534 830<br />
Executive Council 8 561 691 7 819 192<br />
Councillors 2 315 676 2 438 049<br />
18. Debt impairment<br />
10 877 367 10 257 241<br />
Debt impairment - 1 148 260<br />
Debts impaired 3 406 059 2 819 204<br />
19. Investment revenue<br />
20. Finance costs<br />
3 406 059 3 967 464<br />
Current borrowings 4 197 185 388<br />
21. Auditors' remuneration<br />
Fees 1 371 936 1 276 749<br />
22. Contracted services<br />
Red Guard Security 218 255 113 229<br />
23. Grants and subsidies paid<br />
24. Bulk purchases<br />
Electricity 352 225 420 077<br />
Water - 83 574<br />
352 225 503 651<br />
34
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
25. Cash generated from operations<br />
Surplus 13 966 795 16 039 738<br />
Adjustments for:<br />
Loss on sale of assets and liabilities (23 233) (87 307)<br />
Debt impairment 7 062 239 -<br />
Movements in provisions 936 783 1 402 264<br />
Other non-cash items - 105 895<br />
Changes in working capital:<br />
Other receivables from non-exchange transactions (6 623 095) 402 315<br />
Consumer debtors (6 958 646) (1 550 060)<br />
Trade and other payables from exchange transactions 5 749 765 2 968 325<br />
VAT 821 644 8 097 317<br />
Unspent conditional grants and receipts - 18 274<br />
26. Related parties<br />
14 932 252 27 396 761<br />
`<br />
Relationships<br />
Councilor - Mr. WN Mdwayingana<br />
Previous Mayor - Mr. S. Plata<br />
Councilor - Mr M. Yamile<br />
Mr Z. Shasha - Municipal Manager<br />
Ms K. Vimbayo - Executive Mayor<br />
Mr. T. Totongwana - Assistant Manager Supply Chain Manager<br />
Ms Bekebu - Office Manager for the Office of the Municipal Manager<br />
Mrs N Nkuhlu - Corporate Service Manager<br />
Ms NF Kopman - Councilor<br />
The <strong>Municipality</strong> bought 10 sheeps to the amount of<br />
R10,000<br />
The <strong>Municipality</strong> sold the car that was used by the<br />
previous Mayor to Mr S. Plata at a price of R75,000<br />
(which was less than a market price of R120,000)<br />
after the Mayor's term in office had expired. Council<br />
resolution was obtained and the council approved the<br />
sale.<br />
The <strong>Municipality</strong> bought 10 sheeps to the amount of<br />
R10,000<br />
The following personnel share the same surname<br />
with the Municipal Manager:<br />
1. Mr M. Shasha - Councilor<br />
2. Mrs Shasha - Store controller<br />
Ms M Vimbayo - sister to the Mayor works as a<br />
security officer within the <strong>Municipality</strong><br />
Mrs S. Totongwana, Assistant Supply Chain<br />
Manager's wife works as a SCM officer within the<br />
<strong>Municipality</strong><br />
Ms S. Bekebu daugter to Ms Bekebu works as an<br />
Intern for the Finance department at the <strong>Municipality</strong><br />
Mr S Mahlati a son to Mrs Nkuhlu works within the<br />
<strong>Municipality</strong><br />
Ms Vuyokazi Kopman works within the <strong>Municipality</strong><br />
Compensation to accounting officer and other key management<br />
Short-term employee benefits 4 501 205 -<br />
Post-employment benefits - Pension - Defined contribution plan 2 505 117 367 440<br />
27. Irregular expenditure<br />
7 006 322 367 440<br />
Add: Irregular Expenditure - current year 1 031 617 15 600 000<br />
Less: Amounts condoned (1 031 617) (15 600 000)<br />
- -<br />
Details of irregular expenditure condoned<br />
Condoned by (condoning authority)<br />
Ntlakotlaza Travel Agency Council Resolution dated 30 June <strong>2011</strong> 1 031 617<br />
35
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
28. Deviation from supply chain management regulations<br />
Paragraph 12(1)(d)(i) of Government gazette No. 27636 issued on 30 May 2005 states that a supply chain management policy<br />
must provide for the procurement of goods and services by way of a competitive bidding process.<br />
Paragraph 36 of the same gazette states that the accounting officer may dispense with the official procurement process in<br />
certain circumstances, provided that he records the reasons for any deviations and <strong>report</strong>s them to the next meeting of the and<br />
includes a note to the <strong>annual</strong> financial statements.<br />
29. Commitments<br />
Authorised capital expenditure<br />
Approved and contracted for<br />
Infrastructure 11 521 067 32 951 205<br />
Community - 4 216 533<br />
Buildings - 4 237 074<br />
Other - 3 201 360<br />
11 521 067 44 606 172<br />
Approved but not yet contracted for<br />
Infrastructure 7 819 700 1 444 181<br />
Operating leases - as lessee (expense)<br />
Minimum lease payments due<br />
- within one year 178 828 162 571<br />
- in second to fifth year inclusive 256 133 232 848<br />
434 961 395 419<br />
Operating lease payments represent rentals payable by the municipality for certain of its office properties. Leases are<br />
negotiated for an average term of seven years and rentals are fixed for an average of three years. No contingent rent is<br />
payable.<br />
Operating leases - as lessor (income)<br />
Minimum lease payments due<br />
- within one year 148 830 135 300<br />
Operating Leases consists of the following:<br />
Certain of the municipality's land and building are held to generate rental income. Lease agreements are non-cancellable and<br />
have terms of 5 years. There are no contigent rents receivable.<br />
30. Contingencies<br />
Contingent Liability<br />
Claim for default 2 121 174 2 121 174<br />
The <strong>Municipality</strong> is being sued by the Municipal Councilors Pension Fund for the default of contribution payment. Should<br />
Council be unsuccessful in defending the claim, there is a possibility that the claim will be settled from Equitable share.<br />
36
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
31. Risk management<br />
Financial risk management<br />
The municipality’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate<br />
risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.<br />
Liquidity risk<br />
The municipality’s risk to liquidity is a result of the funds available to cover future commitments. The municipality manages<br />
liquidity risk through an ongoing review of future commitments and credit facilities.<br />
The information below analyses the municipality’s financial liabilities and net-settled derivative financial liabilities into relevant<br />
maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The<br />
amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their<br />
carrying balances as the impact of discounting is not significant.<br />
Later than one month and not later than one year (<strong>2011</strong>: R349,092) and Later than one year and not later than twenty years<br />
(<strong>2011</strong>: R9 343 428)<br />
Later than one month and not later than one year (<strong>2010</strong>: R121,795) and Later than one year and not later than twenty years<br />
(<strong>2010</strong>: R3,524,429)<br />
Interest rate risk<br />
As the municipality has no significant interest-bearing assets, the municipality's income and operating cash flows are<br />
substantially independent of changes in market interest rates.<br />
The municipality's interest rate risk arises from long term borrowings. Borrowings issued at fixed rates exposes the municipality<br />
to fair value interest rate risk.<br />
At year end, financial instruments exposed to interest rate risk were as follows:<br />
`<br />
Financial instrument <strong>2011</strong> <strong>2010</strong><br />
Call deposits 2 405 299 2 399 860<br />
Development Bank of South Africa - Interest on a Loan 349 092 121 795<br />
32. Going concern<br />
We draw attention to the fact that at 30 June <strong>2011</strong>, the municipality had accumulated surplus of R 14 014 134 and that the<br />
municipality's total liabilities exceed its assets by R 66 452 219.<br />
The <strong>annual</strong> financial statements have been prepared on the basis of accounting policies applicable to a going concern. This<br />
basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of<br />
liabilities, contingent obligations and commitments will occur in the ordinary course of business.<br />
33. Additional disclosure in terms of Municipal Finance Management Act<br />
Contributions to organised local government<br />
Current year subscription / fee 617 798 212 435<br />
Amount paid - current year (617 798) (130 834)<br />
Audit fees<br />
- 81 601<br />
Amount paid - current year 1 371 936 1 276 749<br />
37
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
33. Additional disclosure in terms of Municipal Finance Management Act (continued)<br />
PAYE and UIF<br />
Opening balance - 276 681<br />
Current year subscription / fee 2 222 905 4 273 147<br />
Amount paid - current year - (4 332 816)<br />
2 222 905 217 012<br />
The balance represents PAYE and UIF deducted from the June <strong>2011</strong> and June <strong>2010</strong> payroll. These amounts were paid during<br />
July <strong>2011</strong> and July <strong>2010</strong> respectively.<br />
Pension and Medical Aid Deductions<br />
Current year subscription / fee - (8 838 036)<br />
Amount paid - current year - 8 838 036<br />
VAT<br />
- -<br />
VAT receivable 1 390 023 2 211 667<br />
VAT output payables and VAT input receivables are shown in note .<br />
All VAT returns have been submitted by the due date throughout the year.<br />
34. Utilisation of Long-term liabilities reconciliation<br />
Long-term liabilities raised 349 092 -<br />
Long-term liabilities have been utilized in accordance with the Municipal Finance Management Act. Sufficient cash has been<br />
set aside to ensure that long-term liabilities can be repaid on redemption date.<br />
35. Intangible assets<br />
Computer software, internally<br />
generated<br />
Cost /<br />
Valuation<br />
<strong>2011</strong> <strong>2010</strong><br />
Accumulated Carrying value Cost /<br />
amortisation<br />
Valuation<br />
and<br />
accumulated<br />
impairment<br />
Accumulated Carrying value<br />
amortisation<br />
and<br />
accumulated<br />
impairment<br />
58 037 - 58 037 - - -<br />
36. Current portion of borrowings<br />
At fair value through surplus or deficit<br />
DBSA Loan - Current portion transferred to current liability<br />
Terms and conditions<br />
349 092 121 795<br />
349 092 121 795<br />
- -<br />
Current liabilities<br />
Fair value through surplus or deficit 349 092 121 795<br />
38
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
Notes to the Annual Financial Statements<br />
Figures in Rand <strong>2011</strong> <strong>2010</strong><br />
36. Current portion of borrowings (continued)<br />
- -<br />
349 092 121 795<br />
37. Other revenue<br />
Other income 635 602 550 186<br />
38. Reconciliation between budget and statement of financial performance<br />
Reconciliation of budget surplus/deficit with the surplus/deficit in the statement of financial performance:<br />
Adjusted for:<br />
Gain on the sale of assets 23 233 87 307<br />
Deficit / surplus of actual revenue and expenditure in comparison to budget (20 367 392) (11 327 778)<br />
Other (specify) 34 358 293 27 280 205<br />
Net surplus per approved budget 14 014 134 16 039 734<br />
39
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Annual Financial Statements for the year ended 30 June <strong>2011</strong><br />
40<br />
The supplementary information presented does not form part of the <strong>annual</strong> financial statements and is unaudited
Development Bank of South Africa 3 646 224 6 046 296 - 9 692 520 - -<br />
3 646 224 6 046 296 - 9 692 520 - -<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix A<br />
June <strong>2011</strong><br />
Schedule of external loans as at 30 June <strong>2010</strong><br />
Loan<br />
Number<br />
Redeemable Balance at<br />
30 June<br />
<strong>2010</strong><br />
Received<br />
during the<br />
period<br />
Redeemed<br />
written off<br />
during the<br />
period<br />
Balance at<br />
30 June<br />
<strong>2011</strong><br />
Carrying<br />
Value of<br />
Property,<br />
Plant &<br />
Equip<br />
Other Costs<br />
in<br />
accordance<br />
with the<br />
MFMA<br />
Rand Rand Rand Rand Rand Rand<br />
Loan Stock<br />
Structured loans<br />
Funding facility<br />
Development Bank of South<br />
Africa<br />
DBSA Loan EC102527 30 Sep 2028 3 646 224 6 046 296 - 9 692 520 - -<br />
Bonds<br />
Other loans<br />
Lease liability<br />
Annuity loans<br />
Government loans<br />
Total external loans<br />
3 646 224 6 046 296 - 9 692 520 - -<br />
Page 41
Analysis of property, plant and equipment as at 30 June <strong>2010</strong><br />
Cost/Revaluation Accumulated depreciation<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix B<br />
June <strong>2011</strong><br />
Opening Additions Disposals Transfers Revaluations Other changes, Closing Opening Disposals Transfers Depreciation Impairment loss Closing Carrying<br />
Balance<br />
movements Balance Balance<br />
Balance value<br />
Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand<br />
Land and buildings<br />
Infrastructure<br />
Community Assets<br />
Page 42
Computers - software & programming - 58 - - - - 58 - - - - - - 58<br />
- 58 - - - - 58 - - - - - - 58<br />
Intangible assets - 58 - - - - 58 - - - - - - 58<br />
- 58 - - - - 58 - - - - - - 58<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix B<br />
June <strong>2011</strong><br />
Analysis of property, plant and equipment as at 30 June <strong>2010</strong><br />
Cost/Revaluation Accumulated depreciation<br />
Opening Additions Disposals Transfers Revaluations Other changes, Closing Opening Disposals Transfers Depreciation Impairment loss Closing Carrying<br />
Balance<br />
movements Balance Balance<br />
Balance value<br />
Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand<br />
Heritage assets<br />
Specialised vehicles<br />
Other assets<br />
Total property plant and equipment<br />
Agricultural/Biological assets<br />
Intangible assets<br />
Investment properties<br />
Total<br />
Page 43
Segmental analysis of property, plant and equipment as at 30 June <strong>2010</strong><br />
Cost/Revaluation Accumulated Depreciation<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
<strong>Municipality</strong> - - - - - - - - - - - - - -<br />
Municipal Owned Entities - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
Page 44<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix C<br />
June <strong>2011</strong><br />
Opening Additions Disposals Transfers Revaluations Other changes, Closing Opening Disposals Transfers Depreciation Impairment deficit Closing Carrying<br />
Balance<br />
movements Balance Balance<br />
Balance value<br />
Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand<br />
<strong>Municipality</strong><br />
Executive & Council/Mayor and<br />
- - - - - - - - - - - - - -<br />
Council<br />
Finance & Admin/Finance - - - - - - - - - - - - - -<br />
Planning and Development/Economic<br />
- - - - - - - - - - - - - -<br />
Development/Plan<br />
Health/Clinics - - - - - - - - - - - - - -<br />
Comm. & Social/Libraries and archives - - - - - - - - - - - - - -<br />
Housing - - - - - - - - - - - - - -<br />
Public Safety/Police - - - - - - - - - - - - - -<br />
Sport and Recreation - - - - - - - - - - - - - -<br />
Environmental Protection/Pollution<br />
- - - - - - - - - - - - - -<br />
Control<br />
Waste Water Management/Sewerage - - - - - - - - - - - - - -<br />
Road Transport/Roads - - - - - - - - - - - - - -<br />
Water/Water Distribution - - - - - - - - - - - - - -<br />
Electricity /Electricity Distribution - - - - - - - - - - - - - -<br />
Other/Air Transport - - - - - - - - - - - - - -<br />
Municipal Owned Entities<br />
- - - - - - - - - - - - - -<br />
Total
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - -<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix C<br />
June <strong>2011</strong><br />
Segmental analysis of property, plant and equipment as at 30 June <strong>2010</strong><br />
Cost/Revaluation Accumulated Depreciation<br />
Opening Additions Disposals Transfers Revaluations Other changes, Closing Opening Disposals Transfers Depreciation Impairment deficit Closing Carrying<br />
Balance<br />
movements Balance Balance<br />
Balance value<br />
Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand Rand<br />
Page 45
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix D<br />
June <strong>2011</strong><br />
Segmental Statement of Financial Performance for the year ended<br />
Prior Year<br />
Current Year<br />
Actual Actual Surplus<br />
Actual Actual Surplus<br />
Income Expenditure /(Deficit)<br />
Income Expenditure /(Deficit)<br />
Rand Rand Rand Rand Rand Rand<br />
<strong>Municipality</strong><br />
- - - Executive & Council/Mayor and Council - - -<br />
- - - Finance & Admin/Finance - - -<br />
- - - Planning and Development/Economic<br />
- - -<br />
Development/Plan<br />
- - - Health/Clinics - - -<br />
- - - Comm. & Social/Libraries and archives - - -<br />
- - - Housing - - -<br />
- - - Public Safety/Police - - -<br />
- - - Sport and Recreation - - -<br />
- - - Environmental Protection/Pollution<br />
- - -<br />
Control<br />
- - - Waste Water Management/Sewerage - - -<br />
- - - Road Transport/Roads - - -<br />
- - - Water/Water Distribution - - -<br />
- - - Electricity /Electricity Distribution - - -<br />
- - - Other/Air Transport - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
Municipal Owned Entities<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
Other charges<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - <strong>Municipality</strong> - - -<br />
- - - Municipal Owned Entities - - -<br />
- - - Other charges - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
Page 46
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix D<br />
June <strong>2011</strong><br />
Segmental Statement of Financial Performance for the year ended<br />
Prior Year<br />
Current Year<br />
Actual Actual Surplus<br />
Actual Actual Surplus<br />
Income Expenditure /(Deficit)<br />
Income Expenditure /(Deficit)<br />
Rand Rand Rand Rand Rand Rand Rand<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - - - -<br />
- - - Total - - -<br />
Page 47
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix E(1)<br />
June <strong>2011</strong><br />
Actual versus Budget(Revenue and Expenditure) for the year ended 30 June<br />
<strong>2010</strong><br />
Current year Current year<br />
<strong>2010</strong> <strong>2010</strong><br />
Act. Bal. Adjusted<br />
budget<br />
Variance<br />
Rand Rand Rand Var<br />
Explanation of Significant Variances<br />
greater than 10% versus Budget<br />
Revenue<br />
Sale of goods - - - - (Explanations to be recorded)<br />
Sale of goods in<br />
- - - -<br />
agricultural activities<br />
Rendering of services - - - -<br />
Rendering of services in<br />
- - - -<br />
agricultural activities<br />
Property rates 3 402 286 - 3 402 286 -<br />
Service charges 376 339 - 376 339 -<br />
Levies - - - -<br />
Property rates - penalties<br />
- - - -<br />
imposed and collection<br />
charges<br />
Sales of housing - - - -<br />
Construction contracts - - - -<br />
Royalty income - - - -<br />
Rental of facilities and 427 566 - 427 566 -<br />
equipment<br />
Interest received (trading) - - - -<br />
Dividends received - - - -<br />
Income from agency 113 025 - 113 025 -<br />
services<br />
Public contributions and<br />
- - - -<br />
donations<br />
Fines 1 256 813 - 1 256 813 -<br />
Licences and permits - - - -<br />
Government grants & 99 032 765 - 99 032 765 -<br />
subsidies<br />
Municipal Revenue UD1 9 720 473 - 9 720 473 -<br />
Municipal Revenue UD2 - - - -<br />
Revenue 1 522 832 - 522 832 -<br />
Revenue 2 692 938 - 692 938 -<br />
Miscellaneous other<br />
- - - -<br />
revenue<br />
Administration and<br />
- - - -<br />
management fees<br />
received<br />
Fees earned - - - -<br />
Commissions received - - - -<br />
Royalties received - - - -<br />
Rental income - - - -<br />
Discount received - - - -<br />
Recoveries - - - -<br />
Other income 1 - - - -<br />
Other income 2 - - - -<br />
Other income 3 - - - -<br />
Other income 635 601 - 635 601 -<br />
Other farming income 1 - - - -<br />
Other farming income 2 - - - -<br />
Other farming income 3 - - - -<br />
Other farming income 4 - - - -<br />
Other farming income - - - -<br />
Government grants - - - -<br />
Interest received -<br />
investment<br />
- - - -<br />
Page 48
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix E(1)<br />
June <strong>2011</strong><br />
Actual versus Budget(Revenue and Expenditure) for the year ended 30 June<br />
<strong>2010</strong><br />
Current year Current year<br />
<strong>2010</strong> <strong>2010</strong><br />
Act. Bal. Adjusted<br />
budget<br />
Variance<br />
Explanation of Significant Variances<br />
greater than 10% versus Budget<br />
Interest received - other - - - -<br />
Dividends received - - - -<br />
Expenses<br />
116 180 638 - 116 180 638 -<br />
Personnel (42 290 416) - (42 290 416) -<br />
Manufacturing -<br />
- - - -<br />
Employee costs<br />
Remuneration of (10 877 366) - (10 877 366) -<br />
councillors<br />
Administration - - - -<br />
Transfer payments - - - -<br />
Depreciation - - - -<br />
Impairment - - - -<br />
Amortisation - - - -<br />
Impairments - - - -<br />
Reversal of impairments - - - -<br />
Finance costs (4 197) - (4 197) -<br />
Debt impairment (7 062 239) - (7 062 239) -<br />
Collection costs - - - -<br />
Repairs and maintenance<br />
- - - -<br />
- Manufacturing expenses<br />
Repairs and maintenance (8 422 481) - (8 422 481) -<br />
- General<br />
Repairs and maintenance<br />
- - - -<br />
- General<br />
Bulk purchases (352 225) - (352 225) -<br />
Contracted Services (218 255) - (218 255) -<br />
Grants and subsidies paid - - - -<br />
Cost of housing sold - - - -<br />
General Expenses (32 962 560) - (32 962 560) -<br />
Other (taken out of<br />
- - - -<br />
General expenses)<br />
Other (taken out of<br />
- - - -<br />
General expenses)<br />
Other (taken out of<br />
- - - -<br />
General expenses)<br />
Other (taken out of<br />
- - - -<br />
General expenses)<br />
Other (taken out of<br />
General expenses)<br />
- - - -<br />
Other revenue and costs<br />
(102 189 739) - (102 189 739) -<br />
Gain or loss on disposal 23 233 - 23 233 -<br />
of assets and liabilities<br />
Gain or loss on exchange<br />
- - - -<br />
differences<br />
Fair value adjustments - - - -<br />
Gains or losses on<br />
- - - -<br />
biological assets and<br />
agricultural produce<br />
Income from equity<br />
accounted investments<br />
- - - -<br />
Page 49
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix E(1)<br />
June <strong>2011</strong><br />
Actual versus Budget(Revenue and Expenditure) for the year ended 30 June<br />
<strong>2010</strong><br />
Current year Current year<br />
<strong>2010</strong> <strong>2010</strong><br />
Act. Bal. Adjusted<br />
budget<br />
Variance<br />
Explanation of Significant Variances<br />
greater than 10% versus Budget<br />
Gain or loss on disposal<br />
- - - -<br />
of non-current assets held<br />
for sale or disposal<br />
groups<br />
Taxation - - - -<br />
Discontinued operations - - - -<br />
23 233 - 23 233 -<br />
Net surplus/ (deficit) for<br />
the year<br />
14 014 132 - 14 014 132 -<br />
Page 50
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix E(2)<br />
June <strong>2011</strong><br />
Budget Analysis of Capital Expenditure as at 30 June<br />
<strong>2010</strong><br />
Additions Revised Variance Variance<br />
Budget<br />
Rand Rand Rand %<br />
Explanation of significant<br />
variances from budget<br />
<strong>Municipality</strong><br />
Executive & Council/Mayor and<br />
- - - -<br />
Council<br />
Finance & Admin/Finance - - - -<br />
Planning and<br />
- - - -<br />
Development/Economic<br />
Development/Plan<br />
Health/Clinics - - - -<br />
Comm. & Social/Libraries and<br />
- - - -<br />
archives<br />
Housing - - - -<br />
Public Safety/Police - - - -<br />
Sport and Recreation - - - -<br />
Environmental Protection/Pollution - - - -<br />
Control<br />
Waste Water<br />
- - - -<br />
Management/Sewerage<br />
Road Transport/Roads - - - -<br />
Water/Water Distribution - - - -<br />
Electricity /Electricity Distribution - - - -<br />
Other/Air Transport - - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
Municipal Owned Entities<br />
- - - -<br />
Other charges<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
61 159 - (61 159) -<br />
- - - -<br />
- - - -<br />
- - - -<br />
- - - -<br />
Page 51
Reason for<br />
delay/withholdi<br />
ng of funds<br />
Did your<br />
municipa<br />
lity comp<br />
ly with<br />
the grant<br />
condition<br />
s in<br />
terms of<br />
grant<br />
framewor<br />
k in the<br />
latest<br />
Division<br />
of<br />
Revenue<br />
Reason for<br />
noncompliance<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix F<br />
Disclosures of Grants and Subsidies in terms of Section 123 MFMA, 56 of 2003<br />
June <strong>2011</strong><br />
Name of<br />
Grants<br />
Name of<br />
organ of<br />
state or<br />
municipal<br />
entity<br />
Quarterly Receipts Quarterly Expenditure Grants and Subsidies delayed /<br />
withheld<br />
Act<br />
Mar Jun Sep Dec Mar Mar Jun Sep Dec Mar Mar Jun Sep Dec Mar Yes/ No<br />
- - - - - - - - - - - - - - - No<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
Note: A municipality should provide additional information on how a grant was spent per Vote. This excludes allocations from the Equitable Share.<br />
Section 5 - Page 52 - 17 June 2012 - 02:49 PM
Reason for<br />
delay/withholdi<br />
ng of funds<br />
Did your<br />
municipa<br />
lity comp<br />
ly with<br />
the grant<br />
condition<br />
s in<br />
terms of<br />
grant<br />
framewor<br />
k in the<br />
latest<br />
Division<br />
of<br />
Revenue<br />
Reason for<br />
noncompliance<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix F<br />
Disclosures of Grants and Subsidies in terms of Section 123 MFMA, 56 of 2003<br />
June <strong>2011</strong><br />
Name of<br />
Grants<br />
Name of<br />
organ of<br />
state or<br />
municipal<br />
entity<br />
Quarterly Receipts Quarterly Expenditure Grants and Subsidies delayed /<br />
withheld<br />
Act<br />
Mar Jun Sep Dec Mar Mar Jun Sep Dec Mar Mar Jun Sep Dec Mar Yes/ No<br />
- - - - - - - - - - - - - - - No<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
Note: A municipality should provide additional information on how a grant was spent per Vote. This excludes allocations from the Equitable Share.<br />
Section 5 - Page 53 - 17 June 2012 - 02:49 PM
Reason for<br />
delay/withholdi<br />
ng of funds<br />
Did your<br />
municipa<br />
lity comp<br />
ly with<br />
the grant<br />
condition<br />
s in<br />
terms of<br />
grant<br />
framewor<br />
k in the<br />
latest<br />
Division<br />
of<br />
Revenue<br />
Reason for<br />
noncompliance<br />
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Appendix F<br />
Disclosures of Grants and Subsidies in terms of Section 123 MFMA, 56 of 2003<br />
June <strong>2011</strong><br />
Name of<br />
Grants<br />
Name of<br />
organ of<br />
state or<br />
municipal<br />
entity<br />
Quarterly Receipts Quarterly Expenditure Grants and Subsidies delayed /<br />
withheld<br />
Act<br />
Mar Jun Sep Dec Mar Mar Jun Sep Dec Mar Mar Jun Sep Dec Mar Yes/ No<br />
- - - - - - - - - - - - - - - No<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
- - - - - - - - - - - - - - -<br />
Note: A municipality should provide additional information on how a grant was spent per Vote. This excludes allocations from the Equitable Share.<br />
Section 5 - Page 54 - 17 June 2012 - 02:49 PM
NOTES
NOTES
<strong>Intsika</strong> <strong>Yethu</strong> <strong>Municipality</strong><br />
Privave Bag X 1251 Cofimvaba 5380<br />
201 Main Street Cofimvaba<br />
Tel: 047 874 8700<br />
Fax: 047 874 0010<br />
Email:info@intsikayethu.gov.za<br />
Customer Care line: 0860 042281