South African Cities Network - Annual Report 2009

8/7/2019 South African Cities Network - Annual Report 2009

1/40

S A C N A N N U A L R e p o R t 2 0 0 9 | 1

ANNUAL REPORT 2009


2/40

| S A C N A N N U A L R e p o R t 2 0 0 92


3/40


This report is published by

South Arican Cities Network (SACN)Joburg Metro Building

16th Floor, 158 Loveday Street,

Braamontein 2017

PO Box 32160, Braamontein 2017

Tel: 011 407 6471 Fax: 011 403 5230

www.sacities.net

Project Managers:

Supriya Kalidas

Editor: Amanda de Lilly, Clarity Editorial

[email protected]

Designer: Karien van der Westhuizen

[email protected]

Photographs (unless otherwise

credited): Omar Dresel, Arndt Husar,

Anthony Maturin, Thom Khosa,

Bruce Sutherland and Astrid Wood.

Printed by: Hansa Print, Cape Town

contents

Vision and mission

Members, partners and secretariat

Chairpersons report or the year ended 30 June 2009

Chie executive ocers perormance management report

Board o Directors

Annual nancial statements

2

3

4

6

16

18


4/40


vision and mission

The South Arican Cities Network (SACN) is:An established network o South Arican cities and partners that encourage the exchange o inormation, experience and

best practices on urban development and city management.

An initiative o the Minister or Cooperative Governance and Traditional Aairs (ormerly DPLG) and nine city municipalities,

in partnership with the South Arican Local Government Association (SALGA).

The goals o SACN are to:Promote good governance and management o South Arican cities.

Analyse strategic challenges acing South Arican cities, particularly in the context o global economic integration and

national development.

Collect, collate, analyse, disseminate and apply the experience o large city government in a South Arican context.Promote a shared-learning partnership between dierent spheres o government to support the governance o South

Arican cities.


5/40


membersBualo City Municipality

City o Cape Town

Ekurhuleni Metropolitan Municipality

eThekwini Metropolitan municipality

City o Johannesburg

Mangaung Local Municipality

Msunduzi Local Municipality

Nelson Mandela Bay metropolitan municipality

City o Tshwane

partnersDepartment o Cooperative Governance and Traditional

Aairs (ormerly DPLG)

South Arican Local Government Association (SALGA)

secretariatSithole Mbanga, CEO

Supriya Kalidas, Executive Manager: Finance and

Corporate Support Services

Sharon Lewis: Executive Manager: Programmes

Astrid Wood, Programmes Manager

Sadhna Bhana, Programmes CoordinatorLetlhogonolo Dibe and Clement Mpurwana, Finance

and Corporate Support Services.

Secretariat team building: Supriya Kalidas, Sithole Mbanga, Clement Mpurwana, Letlhogonolo Dibe, Sadhna Bhana,Sharon Lewis and Astrid Wood


6/40


chairpersons report for the yearended 30 june 2009Due to changing roles among municipal leaders in the South Arican Cities Network (SACN) member cities

during 2008/09, a number o directors resigned rom the Board, including the chairperson and ormer executive

mayor o Bualo City municipality, Ms Zintle Peter. Councillor Moses Maseko, rom Ekurhuleni municipality,

has served as acting chairperson since March 2009. Other resignations rom the Board were Mr Andrew

Boraine, who has served on the Board since the inception o SACN, Councillor Christine Walters, Mr Gaster

Sharpley, and Dr Marietjie Kruger. The SACN secretariat is very grateul to all o these directors or the time

and energy they put into governing SACN. Their guidance and leadership has been invaluable.

Chairpersons message

Members o the Board have examined the SACNs opera-

tional and nancial systems, and ound them to be robust

and ecient. These systems bear testimony to a sound

organisation, as reported by the auditors over the last ve

years. The table on the right is a summary o the SACNs

total revenue and expenditure rom 2002/03 to 2008/09,

with projected estimates to 2011/12. The revenue and

expenditure or the current reporting year are explained

in detail in the directors report o the annual nancial

statements.

In December 2009, the Board commissioned a mid-term

review o the perormance o SACN in terms o the

Strategic Plan 2006-2011. The eedback received rom

stakeholders indicate that there is a general sense that

the SACN has done exceedingly well in ullling its role

within the realms o knowledge generation and knowl-

edge dissemination. Overall, the review ound that SACN

is well managed, operates at a high level o eciency, and

provides cost-eective services to its member cities. The

Board has also noted the key recommendations about

improving perormance in the remaining implementationperiod, including extending SACNs reach to municipalities

beyond its member cities, and improving the marketing

exposure o its knowledge products. One o the key chal-

lenges or SACN, as highlighted in the review, is how to

encourage cities to translate the knowledge they acquire

at learning events and through publications into action

that would result in real improvement o city practices.

A number o programmes to extend SACNs reach

beyond its nine member cities were added to the 2009/10

business plan. We are condent that the secretariat will

manage the additional programmes well. Sharing our

experience o developmental local government with other

cities and towns in South Arica and on the Arican con-

tinent gives us an opportunity to test the organisational

capacity o the SACN secretariat, and prepare ourselves

or the next edition o the State o the Cities Report.

The Board has requested that the SACN adopt a proac-

tive approach in advancing the urban agenda in South

Aricas policy-making landscape by playing a greater role

in supporting national departments engaged in policy-

making and legislation that aects urban development.

During the past year the SACN secretariat has played a

key role in the development o the National Urban Devel-

opment Framework, and has infuenced the National Land

Transport Act and the National Climate Change Response

Policy by making strategic, evidence-based inputs. In

order to ensure that these policy impacts are also elt inthe local sphere, the board membership represents a pro-

ductive and balanced mix between elected and appointed

ocials rom the member cities.


7/40


The Board has approved an annual increase in unding,

to be raised through an increase o 10 per cent in annual

membership ees, and an additional once-o grant o

R268 000 per member city or the next edition o the

State o the Cities Report. We have careully considered

the need to extend the SACNs work on the State o Cities

reporting, with the clear intention o supporting the mem-

ber cities in their interactions on the global stage.

We remain satised that the SACN secretariat is in

capable hands. The organisation continues to improve

its operational eciency and grow in strength. The sus-

tained growth in the SACN budget and outputs requires

increased oversight, and the directors are all committed

to providing appropriate support to the secretariat. In

keeping with the principles o transparency and eciency,

we are pleased to submit the 2008/09 annual nancial

statements to our partner organisations in government,

the international and national donor community, the South

Arican Local Government Association, and especially our

member cities, condent in the knowledge that these

have passed the highest level o scrutiny.

Councillor Moses Maseko

Acting Chairperson 2008/09

Financial summary 2002/03 to 2011/12

R Thon

OuTcOme medium-TeRm esTimaTe

at at at at at at at

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

Revenue

of which:

Subscriins 1 350 2 025 2 228 2 450 2 695 2 965 3 261 3 587 3 946 4 340

orainal gran:DpLG

1 500 1 500 1 500 1 590 4 400 4 700 4 815 5 100 5 400

ohr grans 1 091 3 061 2 315 4 646 3 838 2 739 8 616 9 410 4 000 4 000

ohr incm (inrs,

sal gds) 32 12 276 717 609 590 1 397 400 450 450

Total revenue 2 473 6 598 6 319 9 313 8 732 10 694 17 974 18 212 13 496 14 190

Expenses

of which:

Cmnsain mlys

608 1 581 2 198 2 307 2 572 2 873 3 820 4 690 5 300 5 989

ohr scrariarunning css

1 105 1 498 1 386 1 193 800 778 1 089 817 923 1 043

prgramm css 1 023 3 131 2 617 4 910 4 985 7 176 12 288 12 705 7 273 7 159

Total expenses 2 736 6 210 6 201 8 410 8 357 10 827 17 197 18 212 13 496 14 190

Surplus / (Decit) (263) 388 118 903 375 (133) 777

Raind arnings (263) 125 243 1 146 1 521 1 388 2 165 2 165 2 165 2 165


8/40


chief executive officers report1 July 2008 to 30 June 2009

The SACNs expenditure grew by an unprecedented 59 per cent in 2008/09. This was matched by a 49 per

cent growth in the number o programme outputs (publications, learning events and video records o learning

events). This report considers the extent to which the SACN has delivered programme outputs against targets

in the 2008/09 business plan. It refects on the quality o outputs and outcomes, and records the learning and

policy impacts o the SACN programme in 2008/09.

Table 1: SACN expenditure and outputs since 2003/04

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 Total

exndiur Rm 6.209 6.200 8.410 8.357 10.828 17.198 57.202

Incras n rvius yar (%) -0.1 35.6 -0.6 29.6 58.8

Numbr uus 8 21 29 40 37 55 190

Incras n rvius yar (%) 162.5 38.1 37.9 -7.5 48.6

Programme perormance against output targetsThe SACN delivers two main types o outputs - publications and learning events. Publications are knowledge generation

activities, and learning events are classied as knowledge dissemination activities. Due to increases in expenditure since

2006/07, the number o planned outputs in the 2008/09 business plan was signicantly higher than in previous years.

Table 2: Summary o SACN outputs delivered since 2003/04

2003/04 2004/05 2005/06 2006/07 2007/08 2008/092008/09Planned

N. larning vns 6 17 21 26 29 37 40

N. vid rcrds

vns

1 9 3 3 3

N. ublicains 2 4 7 5 5 15 17

Total number o outputs 8 21 29 40 37 55 60


9/40


Overall, the SACN completed 37 out o 40 planned learn-

ing events. Three events were postponed to July 2009

and will be counted as 2009/10 outputs. Fiteen o the

17 planned publications were completed; the remaining

two are in production and should be completed early in

2009/10.

The ollowing tables summarise the outputs delivered

in 2008/09.

Table 3a: Learning events hosted by the SACN during2008/09

Learning event Date Objective

First quarter o 2008/09

Ciy Dvlmn Sragy (CDS)rrnc gru n h 2010 FIFA WrldCu (FWC)

22-23 July 2008 t cnsidr and discuss lading racic n an arksand ublic viwing sluins r mga-vns

Susainabl Ciis sminar nsusainabl ublic ransr

14-15 Augus 2008 t shar knwldg wih inrnainal xrs nsusainabl ublic ransr sluins r SA

Knwldg managmn rrncgru

26-29 Augus 2008 t discuss sragis r cnvring knwldg rmaci xlici

Inclusiv Ciis sminar n cnmicdvlmn in wnshi nds (ttRI)

4-5 Smbr 2008 t shar knwldg abu lcal cnmicdvlmn sragis in wnshis

Inclusiv Ciis rrnc gru nepWp

11-12 Smbr 2008 t discuss insiuinal arrangmns and skillrquirmns r epWp dlivry

Indicars rrnc gru 16 Smbr 2008 t discuss h rviw Sa h Ciis Rrmhdlgy, and h rviw h iniial indicars

prduciv Ciis rrnc gru nrigh lgisics

30 Smbr 2008 t discuss hw lva righ lgisics lanningin CDS rcsss

Second quarter o 2008/09

Wll-gvrnd Ciis sminar nsusainabl municial nanc in

Suhrn Arica

2-3 ocbr 2008 t shar knwldg wihin h rgin n municialnanc racics and brrwing sragis (wih

vid rcrd)

Susainabl Ciis sminar n grnbuilding sandards and by-laws

9 ocbr 2008 t shar knwldg abu hw rgula grnbuilding cnsrucin

CDS rrnc gru n 2010 FIFAWrld Cu (FWC)

23-24 ocbr 2008 t discuss ciy marking, bauicain and urismsragis r big vns


13-14 Nvmbr 2008 t discuss sragis r mnring, larningcmmuniis and arnrshis

Inclusiv Ciis rrnc gru n hexandd public Wrks prgramm(epWp)

20-21 Nvmbr 2008 t discuss epWp dlivry

Scnd SACN urban dvlmncnrnc

2-3 Dcmbr 2008 t cnsul urban dvlmn xrs abu hNainal Urban Dvlmn Framwrk (wih vidrcrd)

Firs ming h Bard Dircrsand AGM r 2008/09

3 Dcmbr 2008 t arv h annual nancial samns andrviw rgrss


10/40


Table 3a: Learning events hosted by the SACN during 2008/09 (continued)

Learning event Date Objective

Third quarter o 2008/09

CDS rrnc gru n 2010 FWC:Indicars

22 January 2009 t rviw h rsd indicars b usd in h2010 Lgacy Rr

Susainabl Ciis sminar n windnrgy

23 January 2009 t shar knwldg bwn Dnmark and SA nwind nrgy rducin and assciad cnmicdvlmn and jb crain nial

CDS rrnc gru n 2010 FWC 27-28 January 2009 t discuss rcl assciad wih hsing h 2010FWC

Susainabl Ciis sminar n urbanbidivrsiy

29-30 January 2009 t shar xrincs valuing clgical andnvirnmnal srvics in h ciis

CDS rrnc gru n 2010 FWC 29-30 January 2009 t discuss disasr-managmn lanning r h

2010 FWCSusainabl Ciis rrnc gru nwas--nrgy

3 Fbruary 2009 t cnsidr and cmmn n h rs dra was--nrgy cas sudis and h iniial asibiliy mdl

CDS xr knwldg sharing inMangaung

12-14 Fbruary 2009 t advis Mangaung n sragic lanning andnancial managmn ransrmain rquird brbcming a mr

Susainabl Ciis ladrshi sudy urn rnwabl nrgy

14-21 Fbruary 2009 t xlr inrnainal lading racic inrming rnwabl nrgy sragis

Wll-gvrnd Ciis sminar nmunicial inrasrucur invsmnlanning

4-5 March 2009 t shar knwldg abu municial inrasrucurinvsmn lanning sragis and racics; and aly h us a lanning l dvld by hDCGtA (x DpLG)

Scnd ming h Bard

Dircrs r 2008/09

20 March 2008 t arv h annual businss lan, rviw

rgrss, dal wih gvrnanc issus, and sharknwldg abu h epWp has 2 and h NainalUrban Dvlmn Framwrk (NUDF) rjc


26-27 March 2009 t discuss sragis r mnring, caching, andcllciv inllignc; and larn wri cas sudis

Fourth quarter o 2008/09

Wll-gvrnd xr knwldgsharing: crdi nhancmn in Msunduzi

6 Aril 2009 t advis Msunduzi n nancial and rainalmanagmn imrvmns rquird imrvcrdi raing and brrwing sragy

Wll-gvrnd Ciis wrksh nsusainabl municial nanc inSuhrn Arica

8 Aril 2009 t dbri h rjc sring cmmi andrrnc gru n h uus and ucms h rs has h susainabl municial nancrjc

Indicars rrnc gru 14 May 2009 t discuss urban bsrvaris, and h rgrssmad in rviwing indicars

Susainabl Ciis rrnc gru nwas--nrgy

22 May 2009 t cnsidr and cmmn n h las dra was--nrgy cas sudis and asibiliy mdl, and lanh launch sminar

Inclusiv Ciis sminar n wnshirnwal (ttRI vrviw curs)

1-4 Jun 2009 t shar knwldg and xrinc wnshirnwal (wih a cus n smallr wns)

Wll-gvrnd Ciis sminar nmunicial inrasrucur unding

2-3 Jun 2009 t rsn and discuss h ndings Wrld BankInsiu (WBI) rsarch ars n inrasrucurinvsmn in Suh Arica

Inclusiv Ciis sminar n urban dscuriy

10-12 Jun 2009 t rsn and discuss h ndings h AricanFd Scuriy Nwrk (AFSUN) rsarch n urband scuriy in Suhrn Arica

Inclusiv Ciis rrnc gru nepWp

23 Jun 2009 t rviw epWp has 2 args and imlmnainlans


25-26 Jun 2009 t discuss knwldg in acin and rviw rgrsswih wriing cas sudis


11/40


Table 3b: SACN publications completed during 2008/09

Publication Launch date Objective

Inclusiv Ciis Rr 2008 Augus 2008 Annual rund-u inclusiv ciy cas sudis and inin ics

Annual Rr 2007/08 Smbr 2008 Annual nancial samns ublishd as rquird by lgislain

Susainabl Ciis Rr 2008 Smbr 2008 Annual rund-u susainabl ciy cas sudis and aricls

Grn Raing tl oc v1.0 Smbr 2008 publishd by h Grn Buildings Cuncil SA wih snsrshi

rm SACN, his l will allw h building indusry ra cbuildings in rms nvirnmnal rrmanc

Sa Ciis rring: Gdracic guid and lki

ocbr 2008 t rvid guidanc n hw bs rar Sa h CiisRrs

Urban Sac ecnmy Sudy Nvmbr 2008 t rvid an vidnc-basd analysis h urban saccnmy

Susainabl public transrovrviw Rr 2009

January 2009 t assmbl cncs and lading racic in h ld susainabl ublic ransr as a bring rr

Sa Municial Financ Rr(Suhrn Arica) phas 1

Fbruary 2009 t rvid an vrviw and analysis h sa municialnancs in nin ciis in h SADC rgin

Urban envirnmn Managmnprgramm - rjc rviw l

May 2009 A cas sudy l dcumning h ucms cmldrjcs in h SA-Dnmark Urban envirnmnal Managmnprgramm (UeMp)

Sa Ciy Financs Rr(2009 uda)

Jun 2009 t rviw and uda h ndings h 2007 Sa CiyFinancs Rr

Guid n hw scur municialnanc in Suhrn Arica

Jun 2009 A hw- guid ha municialiis can us gain a brundrsanding municial nanc in h rgin

Sa epWp in h ciis (2009) Jun 2009 t rsn an analysis ciy rrmanc in dlivring jbshrugh h epWp

2010 FWC Ciy Lgacy Rr Jun 2009 t rvid an vrviw h nial lgacy imacs h2010 FWC and idniy bnchmark daa masur his imac

twnshi Rnwal Surcbk Jun 2009 ovrviw wnshi rnwal rincils, cncs and ladingracic ha will srv as a rsurc r achrs and rainrs

enrgy rm was lki andasibiliy mdl

Jun 2009 A chnical guid ha xlains hw municialiis can dsign andimlmn bigas-gnrain rjcs and a asibiliy mdl

allw hm d rliminary assssmns whhr suchrjcs will wrk in a lcal cnx

The distribution o outputs by theme during 2008/09 refects an emphasis on CDS outputs because o the cross-cutting

nature o this theme. The outputs or the Sustainable, Inclusive and Well-governed cities themes are airly well-balanced,

but there were ew outputs in the Productive Cities theme in this year. This is because many o the Productive Cities projects

have evolved into cross-cutting projects that are best categorised in the CDS theme.

Table 4: Summary o outputs by theme in 2008/09

CDS Productive InclusiveWell-

governedSustainable Other

N. larning vns 13 1 7 6 8 2

N. vid rcrds vns 1 0 1 1 0 0

N. ublicains 3 0 3 3 5 1

Total number o outputs 17 1 11 10 13 3

A NN U

A L

R EP O

R T

20

08

I n cl u

s I ve c

I t Ie s

2 0 08

|1

I n cl u

s I ve c

I t Ie s

2 00 8


12/40

| S A C N A N N U A L R e p o R t 2 0 0 91 0

Quality o outputs

The quality o outputs is measured through a sample survey o participants at learning events, and by considering inormal

and anecdotal eedback rom partners and members. During 2008/09, 230 participants completed survey questionnaires.

Forty-two per cent o the respondents allocated the highest score (5) to the questions in the survey. In general, most par-

ticipants at the SACN learning events were very satised with the quality o all aspects o these events.

Table 5: Results o quality surveys completed or SACN learning events during 2008/09

Rating (1= Bad or little; 5 = Good or a lot)

1 2 3 4 5

Did yu larn smhing nw day? 1 7 42 120 118

Did h inrmain yu rcivd insir yu d smhing

nw r dirn in yur wrk?

2 5 47 87 102

Will h inrmain yu rcivd hl yu d yur jbbr?

2 12 50 106 119

Inviain qualiy scr 3 12 34 55 128

prarary inrmain qualiy scr 2 7 56 76 111

Vnu and caring qualiy scr 6 13 60 89 118

Total 16 56 289 533 696

Four new learning approaches were tested by the SACN

in 2008/09:

The leadership study tour on renewable energy allowed

a small group (15 people) o municipal leaders and sen-

ior decision makers to travel to the UK, Germany and

Denmark to see renewable energy solutions rst-hand.

The Well-governed Cities seminar on municipal inra-

structure investment planning provided an intensive

learning experience in a workshop environment, with

acilitators guiding a group o 20 municipal ocials

through the application o a computer-based municipal

inrastructure investment planning tool.

The CDS knowledge-sharing workshop in Mangaung

and the Well-governed knowledge-sharing workshop

on credit enhancement in Msunduzi brought together

municipal experts and senior ocials in these twomunicipalities. This allowed or a strategic and applied

exchange o ideas, with a view to supporting the cities

with specic and targeted learning interventions.

The Sustainable Cities reerence group on waste-to-

energy used teleconerencing or all o its meetings.

This proved to be very cost- and time-ecient.

Perormance outcomes

These can be measured in terms o the number and pro-

le o people reached, networking outcomes, expenditure

results, and the cost-eectiveness o the particular out-

put.

Number o people reachedSACNs knowledge generation and knowledge dissemi-

nation strategies reach people in person, through pub-

lications and the website. In total, 97 879 people werereached in 2008/09. This is 4 per cent higher than the

gure or 2007/08. Overall, the total reach achieved by

the SACN has grown signicantly every year.


13/40

S A C N A N N U A L R e p o R t 2 0 0 9 | 1 1

SACNs knowledge generation and

knowledge dissemination strategies

reach people in person, throughpublications and the website

Figure 1: The number o people reached by the SACN per year

The 37 learning events hosted by SACN in 2008/09

account or 354 hours o learning, and can be extrapo-

lated to 17 792 person hours o learning. By comparison,

all o SACNs learning events in 2007/08 accounted or 198

hours o learning and 9 544 person hours. This dramatic

growth in 2008/09 was due to the increased number o

events; an increase in the average length o events; and an

increase in the average number o people that attended

each event.

Only one learning event in 2008/09 had to be post-

poned due to insucient attendance, compared to ourin 2007/08. The secretariat has ound that most learning

events achieve attendance gures that exceed the targets

set during event planning. For example, the Sustainable

Cities seminar on wind energy in January 2009 had 284

participants, making it one o the biggest events ever

hosted by SACN.

Prole o people reachedMost o the 1 777 participants at SACN learning events in

2008/09 were rom the nine member cities (31 per cent).

Independent researchers and analysts accounted or 29 per

cent, largely due to the large number o private-sector partic-

ipants at the wind energy seminar in January 2009. National

government and public entities made up 14 per cent o par-ticipants. Participants rom non-member cities made up 11

per cent o the learning event audience in 2008/09, a small

but steadily rising sector.

2003/4 2004/5 2005/6 2006/7 2007/8 2008/9

pl rachdhrugh wbsi 685 26 281 43 211 55 716 63 987 79 644

pl rachdhrugh rin 1 500 2 000 4 000 5 439 25 544 13 368

pl rachdin rsn 230 620 860 1 332 1 183 1 777

100 000

90 000

80 000

70 000

60 000

50 000

40 000

30 000

20 000

10 000

0


14/40


Networking outcomesNetworking meetings are dened as ad hoc meetings with

partners, members and other organisations that serve to

expand or enhance SACNs network o contacts, and help

to urther the objectives o SACN. The SACN secretariat has

kept a record o all networking meetings since 2007/08.

During 2008/09, the SACN secretariat participated in

401 networking meetings. O these, 84 were convened

by SACN. A total o 16 948 people (excluding secretariat

members) were reached through these meetings, and 2330 working hours were dedicated to networking activi-

ties.

As in 2007/08, the majority o the networking meet-

ings (28 per cent) were to provide assistance to partner

organisations including the Department o Cooperative

Governance and Traditional Aairs (ex DPLG), South

Arican Local Government Association (SALGA), United

Cities and Local Governments o Arica (UCLGA), Local

Governments or Sustainability (ICLEI), and other national

government departments.

Cost-eectiveness o SACN operationsThe minimum requirement or cost-eectiveness is that

each member citys subscription expenditure should pro-vide value or money. In order to assess this, the expendi-

ture on SACN programmes is evaluated as a proportion

o the overall budget; and the costs o SACNs learning

approaches and costs per person are analysed.

I one views the budget separately in terms o programme

expenditure (as a proxy or spending on knowledge out-

puts) and operational spend, then it is clear that the sec-

retariat is on a positive trend towards greater eciency.

The percentage o expenditure on programmes (and thusoutputs) rose rom 42 per cent in 2004/05 to 66 per cent

in 2007/08. This trend was maintained in 2008/09, with

the ratio rising to 71 per cent. The secretariat will aim to

increase this ratio to 80 per cent over the medium term

to achieve the international best practice benchmark or

similar programmes.

During 2008/09, reerence group meetings have cost an

average o R230 per person per event, and seminars havecost around R1 340 per person per event. The renewable

energy study tour was not included in these averages, as

this learning approach cost over R80 000 per person.

Table 6: Programme spending as a proportion o total budget

R Thon

OuTcOme

at at at at at at at

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09

Expenses

orainal css (including salaris) 1 713 3 079 3 584 3 500 3 372 3 673 4 909

percentage 63 50 58 42 40 34 29

prgramm css 1 023 3 131 2 617 4 910 4 985 7 154 12 288

percentage 37 50 42 58 60 66 71

Total expenses 2 736 6 210 6 201 8 410 8 357 10 827 17 197

Figure 2: Breakdown o participants at SACN learning events in 2008/09

30%

29%

14%

11%

5%

5%3%3%

SACN mmbr ciis (30%)

Indndn rsarchrs, xrs and raciinrs (29%)

Nainal gvrnmn and ublic niis (14%)

Nn-mmbr ciis (11%)

Dnrs and inrnainal arnrs (5%)

SACN scraria (5%)

prvincial gvrnmn (3%)

ohr lcal gvrnmn rganisains (3%)


15/40


Table 7: Average cost o learning events during rst three quarters o 2008/09

Reerence groupmeetings Seminars andconerences Total

SACN larning vn xndiur R 145 965 R 1 470 090 R 1 616 055

Avrag snd r vn R 8 586 R 91 881 R 46 173

Avrag snd r arician a larning vns R 227 R 1 339 R 909

This is a signicant reduction on the costs o learning events in 2007/08. The cost savings are due to the increased number o

attendees at learning events, as well as cost-saving strategies employed by the SACN secretariat. By comparison, a two-day

commercial conerence currently costs approximately R12 000 per person, and an executive course or master class oered

by an academic institution is approximately R3 500 per day.

Learning and policy impacts

The SACNs analyses o national policy issues at learning

events and in its publications oten have a direct impact

on the ormation and implementation o these policies.

During 2008/09, the SACN was able to infuence national

policy in the ollowing ways:

The Municipal Demarcation Board recommended that

the three non-metro member cities o SACN should

be reclassied as metropolitan municipalities with the

associated devolution o unctions that this implies.Much o the quantitative analysis used to support this

recommendation was drawn rom SACNs 2006 State o

the Cities Report.

The Parliamentary Portolio Committee on transport

invited inputs rom SACN into discussions about the

National Land Transport Bill. The bill deals with intergov-

ernmental arrangements or public transport unctions,

and will have a signicant impact on the autonomy o

cities in dealing with public transport inrastructure and

operations. On the basis o supplementary work fow-

ing rom the State o Municipal Finances Report 2007,

SACN made an evidence-based input that strength-

ened the case or clear devolution o public transport

unctions and unding. This input was well received by

the PPC, resulting in support or this approach in the

legislation.

In the February 2008 Budget, the then Minister o Finance

announced a ve-year extension in the urban develop-

ment zone tax incentive. This was a direct response to a

submission by SACN to the National Treasury, on behal

o member cities. In order to implement this extension,

SACN was asked to acilitate comments on the Taxation

Laws Amendment Act by member cities. Three submis-

sions were orwarded to the National Treasury, and the

amendment act was passed in September 2008.The evaluation report on EPWP outcomes in the cities,

commissioned by SACN, was submitted to the National

Department o Public Works. The report served as an

input into the design o the second phase o the EPWP.

The EPWP received signicant additional allocations in

the February 2009 Budget. The planning or this pro-

gramme is inormed by the analysis commissioned by

SACN or the EPWP reerence group.

SACN has been invited to participate in meetings o

the City Budget Forum, a new intergovernmental orum

convened by the National Treasury to coordinate inputs

into the budget process.

The renewable energy eed-in tari was announced by

the National Energy Regulator o South Arica (NERSA)

in March 2009. This was a positive response to thecall or a eed-in tari made at the SACNs Renewable

Energy City Summit in May 2008. In July 2009, NERSA

made a presentation that indicated the inclusion o

biogas generation in the renewable energy eed-in tari

in uture. The SACN understands that this development

was hastened by the launch o SACNs toolkit and easi-

bility model or waste-to-energy through biogas.

At the sustainable public transport seminar in August

2008, Enrique Penalosa, ormer mayor o Bogota,

Colombia, shared his experience o managing resistance

and protests against the introduction o the Bogota BRT

system - a system that is now hailed as best practice

in international transit. The lessons he shared with local

public transport champions have been applied in the

implementation o the Rea Vaya transit system as a pilot

project in Johannesburg.

The SACN was invited to participate in a series o con-

sultations about the new human settlements strategy.

These included the National Treasurys stakeholder

consultations on the human settlements budget; the

Department o Human Settlements internal strategic

planning session towards a new human settlement

development programme; and the Presidencys inor-

mal consultations on measuring perormance in human

settlement development. It remains to be seen whetherthese inputs will result in policy or institutional change,

and the SACN intends to ollow developments and

report on them.


16/40


Procurement impacts

All services are procured in terms o SACNs procurement

policy, which requires that any contract exceeding R50 000

must be procured through a competitive bidding process.

A scoring system to evaluate quotes includes price, quality

and representivity criteria.

The weighting or these scoring criteria vary rom con-

tract to contract, but tend to be 40 per cent or price; 40

per cent or quality (including experience, qualications

and project proposal); and 20 per cent or gender and

population group representivity in the project team. Bid

evaluations are scored by an objective panel o secretariat

ocers, and a selection report is compiled or each rec-

ommendation.

The CEO approves contracts, but those exceeding

R250 000 must be endorsed by the Management Com-

mittee, and those exceeding R500 000 must be endorsed

by the Board o Directors.

In order to understand the impact o its procurement

practices, the SACN analysed all services contracted rom

2002 to 2008.

Table 8: Summary o contracts issued by the SACN since 2002/03

Year Number o contracts Value o contracts (ZAR) Average value o contracts (ZAR)

2002/03 1 66 728 66 728

2003/04 18 1 816 053 100 892

2004/05 16 1 932 970 120 811

2005/06 19 3 689 158 194 166

2006/07 7 1 592 620 227 517

2007/08 17 6 102 447 358 967

2008/09 19 5 026 739 264 565

Totals 97 20 226 714 208 523

Overall, these contracts were or the purpose o generating or disseminating knowledge. Most o the expenditure was on

knowledge production through research, and printing o publications (87 per cent o the total contract value). Twelve percent o the contracts were or acilitation support.

Table 9: Summary o contracts by output category (2002/03 2008/09)

Type o contract Number o contracts Value o contracts (ZAR) % o total value

Knwldg rducin: Rsarch 60 15 325 166 76%

Knwldg rducin: publicains 19 2 291 245 11%

Knwldg dissminain: Faciliain 17 2 433 685 12%

ohr srvics 1 176 617 1%

Totals 97 20 226 714 100%

Most companies that are contracted to provide services to the SACN are small (employing less than 50 people). An amount

o R11.7 million o SACNs spend since 2002 has thereore contributed to the protability o the SMME sector in South

Arica.

Table 10: Summary o contractors by company size (2002/03 2008/09)

Type o contractor Number o contracts Value o contracts (ZAR) % o total value

Individual xrs 32 4 464 088 22%

Small cmanis 52 11 706 480 58%

Larg cmanis 13 4 056 145 20%

Totals 97 20 226 714 100%

Academic and science institutions have won 22 per cent o all contracts, including the University o Cape Town (UCT), the

Human Sciences Research Council (HSRC), and the Council or Scientic and Industrial Research (CSIR). The remaining 78

per cent o contract spend is through private companies and individuals (R15.7 million since 2002/03).


17/40


Table 11: Summary o contractors by ownership prole (2002/03 2008/09)

Type o contractor Number o contracts Value o contracts (ZAR) % o total value

Acadmic and scinc insiuins 16 4 474 418 22%

priva scr cmanis and individuals 81 15 752 396 78%

of which:

Black wned 29 7 126 513 45%

Wmen wned 36 5 370 557 34%

SACN in the media

During 2008/09 the SACN subscribed to Meltwater News,

an electronic newsclip service. This service allows SACN

to track local and international print and electronic media

reports about municipalities in South Arica (SACN mem-

ber cities in particular). There is a scrolling link to these

news stories on the SACN website.

The SACN eatured in 31 media reports during 2008/09.

There were large variations in the number o stories per

month, with seven reports in January (mostly about wind

energy), and no reerences or August, September and

October in 2008, and February to April in 2009. The SACN

will take steps during 2009/10 to try to achieve at leasttwo reerences in the media every month o the year.

Only one o the 31 stories was written in a negative

tone, eight were positive and 18 were neutral.

Most o these reerences were in the local media, with

three stories in international publications.

Engineering News published ve stories about the

SACN, and Independent Newspapers (IOL) published

two. The most interesting international reerence was in

www.anarkis.net.

Mid-term review o theSACNs perormance interms o the Strategic Plan2006-2011

Stakeholders who were interviewed or the mid-term

review elt that the SACN had ullled their knowledge

generation and knowledge dissemination role very well.

When asked whether the SACN is well managed, and i

it provides cost-eective services to member cities, all

respondents emphatically said absolutely yes. A rep-

resentative o one o the member cities remarked: Theenergy, eagerness and excitement o the SACN team and

what they do or their member cities is a plus, and is wel-

comed. The team is good at conerences, and provides

good quality, best technology, well presented sta, and

well packaged documents. As a member it is not di-

cult to get inormation and documents rom the SACN.Member cities also eel that they receive a good return on

investment or their annual subscriptions.

Secretariat stang

The SACN secretariat stang remained relatively stable

or the third year in a row. We were sad to lose our Pro-

gramme Manager, Mr Seana Nkhahle. His contributions to

the success o the SACN are immeasurable, in particular

his strategic perspectives on urban management. We

were pleased to welcome a new Programme Manager,Ms Astrid Wood, in February 2009. Astrid has a Masters

Degree in City Planning rom the Massachusetts Institute

o Technology, and is contracted to the SACN or three

years.

I would like to thank every member o the secretariat

or the hard work they do, and or their commitment to

excellence in achieving the SACN mandate.

The SACN continues to attract enquiries rom students

and graduates rom the best academic institutions, and we

are developing an internship programme that we tested

or the rst time with Ms Nokuzola Jeness, an undergradu-

ate at Brown University, in July and August 2009. I would

like to thank her or her constructive eedback on how to

scope the internship programme.

Finally, on behal o the secretariat, I would like to thank

the individuals working and learning in the member cities

and partner organisations or their enthusiasm in sharing

experiences and nding innovative solutions to the urban

development and city management challenges that ace

us all in South Arica.

Sithole Mbanga

Chie Executive Ocer


18/40


board of directors

Acting Chairperson

M Maseko

S M Mbanga

Chie Executive Director

A M Boraine

Cape Town Partnership

K D Kekana

City o TshwaneDCGTA (ex DPLG)

N J O Lester

C X GeorgeL H Mekgwe

T M ManyoniDr M O Sutclie S Cele (Alternate)

Y E Patel

(Alternate)

D D Van Rooyen(Alternate) M Maseko

(Alternate)

L Makhanya

(Alternate)

SALGA Ekurhuleni MetropolitanMunicipality

eThekwini MetropolitanMunicipality Mangaung Municipality


19/40


Z C Faku

Bualo City Municipality

C E Walters

City o Johannesburg

Adv J G Richard

E Achmat

Z I Hlatshwayo

P S Ndoni

(Alternate)

I Nielson

(Alternate)

B S Ngubane

(Alternate)

Nelson Mandela Metropolitan Municipality

City o Cape Town

Msunduzi Municipality


20/40


annual financial statements

Index to the annual nancial statements

or the year ended 30 June 2009Directors responsibility statement 19

Independent auditors report 20

Directors report 21

Balance sheet 23

Income statement 24

Statement o changes in reserves 24

Cash fow statement 25

Notes to the annual nancial statements 26-34

The ollowing schedule has been attached or inormation purposes

only and does not orm part o the audited fnancial statements:Detailed expenditure schedule 35-36

Approval

The annual nancial statements set out on pages 18 to 34 have been approved by the Board o Directors and are signed

on its behal by:

_______________________________

Councillor M Maseko

Acting Chairperson

Certicate by the secretary

I conrm that South Arican Cities Network (Association Incorporated under Section 21) has complied with all its statutory

requirements.

________________________________

Mrs S Kalidas

_______________________________

Mr S M Mbanga

Chie Executive Ocer


21/40


Directors responsibility

statement or the yearended 30 June 2009

The directors are responsible or the preparation, integrity

and air presentation o the nancial statements and other

nancial inormation in this report. In preparing these

nancial statements, South Arican Statements o Gener-

ally Accepted Accounting Practice have been ollowed,

applicable accounting assumptions have been used, and

prudent judgments and estimates have been made.

The going concern basis has been used in the prepara-

tion o the nancial statements. Based on orecasts andavailable cash resources, the directors have no reason to

believe that the company will not be a going concern in

the oreseeable uture. The nancial statements support

the viability o the company.

The nancial statements have been audited by the

independent accounting rm, Xabiso Chartered Account-

ants Inc., who were given unrestricted access to all nan-

cial records and related data, including minutes o all

meetings o the Board o Directors and committees o

the Board. The directors believe that all representations

made to the independent auditors during the audit were

valid and appropriate.

The nancial statements were approved by the direc-

tors on 11 September 2009.

______________________________

Councillor M Maseko

Acting Chairperson

_______________________________

Mr S M Mbanga

Chie Executive Ocer


22/40


We have audited the annual nancial statements o South

Arican Cities Network (Association Incorporated under

section 21), which comprise the balance sheet as at 30

June 2009, the income statement, statement o changes

in equity and cash fow statement or the year then ended,

and a summary o signicant accounting policies and other

explanatory notes as set out on pages 21 to 36.

Directors responsibility or the nancialstatementsThe companys directors are responsible or the prepara-

tion and air presentation o these nancial statements in

accordance with South Arican Statements o Generally

Accepted Accounting Practice, and in the manner required

by the Companies Act o South Arica. This responsibility

includes designing, implementing and maintaining inter-

nal control relevant to the preparation and air presenta-

tion o nancial statements that are ree rom material

misstatement, whether due to raud or error; selecting

and applying appropriate accounting policies; and mak-

ing accounting estimates that are reasonable under thecircumstances.

Auditors responsibilityOur responsibility is to express an opinion on these nan-

cial statements based on our audit. Except as described

in the ollowing paragraph, we conducted our audit in

accordance with International Standards on Auditing.

Those standards require that we comply with ethical

requirements, and plan and perorm the audit to obtain

reasonable assurance that the nancial statements are

ree rom material misstatement.

An audit involves perorming procedures to obtain

audit evidence about the amounts and disclosures in the

nancial statements. The procedures selected depend on

the auditors judgment, including the assessment o the

risks o material misstatement o the nancial statements,

whether due to raud or error. In making those risk assess-

ments, the auditor considers internal control relevant to

the entitys preparation and air presentation o the nan-

cial statements, and designs audit procedures that are

appropriate under the circumstances, but not or the pur-

pose o expressing an opinion on the eectiveness o the

entitys internal control. An audit also includes evaluating

the appropriateness o accounting policies used and the

reasonableness o accounting estimates made by man-

agement, as well as evaluating the overall presentation o

the nancial statements.

We believe that the audit evidence we have obtained is

sucient and appropriate to provide a basis or our quali-

ed audit opinion.

Basis or qualied opinionIn common with similar organisations, it is not easible or

the company to institute accounting controls or cash col-

lections rom grants prior to initial entry o the collections

in the accounting records. Accordingly, it was impractical

or us to extend our examination beyond the receipts

actually recorded.

Qualied opinionIn our opinion, except or the possible eects o matters

described in the basis or qualied opinion paragraph,

the nancial position o the South Arican Cities Network

(Association Incorporated under section 21) as o 30 June2009, and its nancial perormance and cash fows or the

year then ended, is in accordance with South Arican State-

ments o Generally Accepted Accounting Practice, and

the requirements o the Companies Act o South Arica.

Supplementary inormationThe schedules set out on pages 35 and 36 have been

attached or inormation purposes only, and are not cov-

ered by the audit opinion.

Xabiso Chartered Accountants Inc.

Registered Auditors

Chartered Accountants (SA)

Per L Dhlamini RA CA (SA): Director

11 September 2009

Independent auditors report to the members o SouthArican Cities Network


23/40


The directors present the attached annual nancial state-

ments and submit their report or the year ended 30 June

2009.

General review o nances: Directors reportThe SACN spent R17.2 million in 2008/09, an increase

o 59 per cent on 2007/08, and R2 million more than the

budgeted expenditure or the year. The additional unding

was raised through a grant rom the ormer Departmento Provincial and Local Government or the research work

towards the National Urban Development Framework.

This expenditure yielded programme outputs that

included 15 new publications, and 37 learning events

that were attended by almost 1 800 people. Programme

expenditure made up 71 per cent o total spend; salaries

made up the second largest spending component at 22 per

cent; and other operating costs amounted to 7 per cent.

Within programme expenditure most o the spending

was on the City Development Strategies theme at R4.7 mil-

lion (38 per cent o programme spend); R2.7 million (22

per cent) was spent on the Well-governed Cities theme),and R2.5 million (20 per cent) was spent on the Sustainable

Cities theme.

The three largest projects undertaken during 2008/09

were the Sustainable Municipal Finance project, covering

nine municipalities within the Southern Arican Develop-

ment Community (SADC) region; the renewable energy

leadership study tour to three European countries; and

the urban space economy research undertaken in support

o the National Urban Development Framework.

The detailed nancial statements or the year are submit-

ted or your consideration.

Share capital and dividendsThe company has no share capital and its memorandum

and articles o association prohibit the payment o divi-

dends to members.

EquipmentDuring the year under review, the company acquired

equipment to the value o R49 243 (2008: R78 423).

Statements o responsibilityThe directors are responsible or the maintenance o

adequate accounting records. The auditors are responsi-

ble or reporting on the air presentation o the nancial

statements. The nancial statements have been prepared

in accordance with Generally Accepted Accounting Prac-

tice, and the requirements o the Companies Act o South

Arica, 1973.

The directors are also responsible or the companys

systems o internal control. These are designed to pro-

vide reasonable, but not absolute assurance as to the

reliability o the nancial statements, to adequately sae-guard, veriy and maintain accountability o assets, and to

prevent and detect misstatement and loss. Nothing has

been brought to the attention o the directors to indicate

that any material breakdown in the unctioning o these

controls, procedures and systems has occurred during the

year under review.

Results or the yearThe results o operations or the year are ully disclosed in

the attached nancial statements.

Post balance sheet events

No material act or circumstance has occurred between

the balance sheet date and the date o this report.

Directors report or the year ended 30 June 2009


24/40


DirectorsThe directors o the company during the year, and as at the date o this report are as ollows:

BOARD MEMBERS ALTERNATE DIRECTORS DESIGNATION/ AFFILIATION

Cuncillr M Mask Acing Chairrsn

A M Brain Ca twn parnrshi

S M M Mbanga Chi excuiv Dircr

N J o LsrY e pal(aind 20 Fbruary 2009)

Darmn Craiv Gvrnanc andtradiinal Aairs ( rmrly DpLG)

C X GrgD D Van Ryn(aind 16 Fbruary 2009)

SALGA

Dr M o Sucli S Cl thkwini Mrlian Municialiy

K D Kkana(aind 1 Dcmbr 2008)

Ciy tshwan

L H Mkgw M Mask ekurhulni Mrlian Municialiy

t M Manyni L Makhanya Mangaung Municialiy

Adv J G Richards p S Ndni Nlsn Mandla Mrlian Municialiy

Z C Faku(aind 30 March 2009)

Bual Ciy Municialiy

C e Walrs Ciy Jhannsburg

e Achma I Nilsn Ciy Ca twn

Z I Hlashway B S Nguban Msunduzi Municialiy

Resignations

N C pr

(rsignd 20 March 2009) Chairrsn & Bual Ciy Municialiy

Dr M Krugr(rsignd 20 Fbruary 2009)

Darmn Craiv Gvrnanc andtradiinal Aairs ( rmrly DpLG)

G Sharly(rsignd 30 March 2009)

Bual Ciy Municialiy

SecretarySecretarial services are perormed by S Kalidas.

Physical address and registered ocesJoburg Metro Building

158 Loveday Street

Braamontein

Johannesburg

Postal addressP.O.Box 32160

Braamontein

2017

AuditorsXabiso Chartered Accountants Inc.

1st Floor, Building 22B

Cnr Woodlands and Kelvin Drive

The Woodlands Oce Park

Woodmead

Telephone: +27(11) 802 4155

Facsimile: +27(11) 802 5857

Xabiso Chartered Accountants Inc. will continue in ofce

in accordance with section 270(2) o the Companies Act.


25/40


Balance sheet as at 30 June 2009

2009 2008

Notes R R

ASSETS 5 147 369 5 622 038

Non-current assets 66 423 98 211

equimn 3 66 423 98 211

Current assets 5 080 946 5 523 827

trad and hr rcivabls 4 15 390 22 560

Accrud incm 5 7 330 735 141

Cash and cash quivalns 6 5 058 226 4 766 126

Total assets 5 147 369 5 622 038

RESERVES AND LIABILITIES 5 147 369 5 622 038

Reserves 2 164 160 1 388 317

Accumulad unds 2 164 160 1 388 317

Non-current liabilities - 8 583

Drrd raing las rnals - 8 583

Current liabilities 2 983 209 4 225 138

trad and hr ayabls 7 1 577 982 1 485 152

prvisins 8 407 751 84 155

Drrd raing las rnals 8 858 -

Drrd gran incm 9 988 618 2 655 831

Total reserves and liabilities 5 147 369 5 622 038


26/40


Income statement or the year ended 30 June 2009

2009 2008

Notes R R

INCOME 17 974 049 10 694 449

Grans 10 13 315 875 7 139 887

Inrs rcivd 12 491 539 236 944

Subscriins rcivd 11 3 261 285 2 964 804

ohr incm 905 350 352 814

EXPENDITURE 17 198 206 10 827 918

Scraria css 4 828 394 3 596 750

Inrmain chnlgy 81 262 76 828

Knwldg managmn and cmmunicains 1 278 174 791 339

Ciy Dvlmn Sragis 4 682 734 894 692

prduciv Ciis 242 339 1 267 109

Inclusiv Ciis 872 793 759 264

Susainabl Ciis 2 498 180 2 002 802

Wll-gvrnd Ciis 2 714 330 1 439 134

SURPLUS / (DEFICIT) FOR THE YEAR 775 843 (133 469)

Statement o changes in reserves or the yearended 30 June 2009

TOTALACCUMULATED

FUNDS

R

Balanc a 1 July 2007 1 521 786

Dci r h yar (133 469)

Balance at 30 June 2008 1 388 317

Surlus r h yar 775 843

Balance at 30 June 2009 2 164 160


27/40


28/40


Notes to the annual nancial statements or the year

ended 30 June 2009The principal accounting policies applied in the preparation o these nancial statements are set out below. These policies have

been applied consistently in all material respects.

1. PRESENTATION OF ANNUAL FINANCIAL STATEMENTSThe annual nancial statements have been prepared in accordance with South Arican Statements o Generally Accepted

Accounting Practice and the Companies Act o South Arica. The annual nancial statements have been prepared on the

historical cost basis, and incorporate the principal accounting policies set out below.

1.1 Accounting conventionThe Association is registered under the Companies Act,

1973, as an association not or gain and as such no part

o its income or property shall be transerred to members,

directly or indirectly. All reserves o the Association are

consequently non-distributable.

1.2 Signicant judgementsIn preparing the annual nancial statements, management

is required to make estimates and assumptions that aect

the amounts represented in the annual nancial state-

ments and related disclosures. Use o available inormation

and the application o judgement is inherent in the orma-tion o estimates. Actual results in the uture could dier

rom these estimates, which may be material to the annual

nancial statements. There are no signicant judgments

and estimates made by management other than those

disclosed.

1.3 EquipmentThe cost o an asset is recognised as an asset when:

it is probable that uture economic benets associated

with the item will fow to the company, and

the cost o the item can be measured reliably.

Costs include costs incurred initially to acquire or construct

an item o tangible assets, and costs incurred subsequently

to add to, replace part o, or service it. I a replacement

cost is recognised in the carrying amount o an item o

tangible assets, the carrying amount o the replaced part

is derecognised.

Assets are carried at cost less accumulated depreciation

and any impairment losses.

Depreciation is provided on all assets to write down the

cost, less residual value, by equal installments over their

useul lives as ollows:

Item Useul lieComputer equipment 3 years

Furniture and ttings 5 years

Oce equipment 5 years

The depreciation charge or each period is recognisedin prot or loss, unless it is included in the carrying amount

o another asset.

The gain or loss arising rom the derecognising o an

item o property, plant and equipment is included in the

equipment und when the item is derecognised.

1.4 Financial instruments1.4.1 Initial recognition

The company classies nancial instruments, or their com-

ponent parts, on initial recognition as a nancial asset, a

nancial liability or an equity instrument in accordance with

the substance o the contractual arrangement.Financial assets and nancial liabilities are recognised on

the companys balance sheet when the company becomes

party to the contractual provisions o the instruments.

Financial assets and liabilities are recognised initially at

air value. In the case o nancial assets or liabilities not

classied at air value through prot and loss, transaction

costs that are directly attributable to the acquisition or issue

o the nancial instrument are added to the air value.

A regular purchase or sale o nancial assets is recog-

nised and derecognised, as applicable, using trade date

accounting.

An asset that is subsequently measured at cost or amor-

tised cost is recognised initially at its air value on the trade

date.

Any change in the air value o the asset to be received

during the period between the trade date and the settle-

ment date is not recognised or assets carried at cost or

amortised cost, other than impairment losses.

Assets carried at air value: the change in air value shall

be recognised in prot or loss, or in equity, as appropri-

ate.

1.4.2 Subsequent measurement

Ater initial recognition, nancial assets are measured as

ollows:Loans and receivables and held-to-maturity investments

are measured at amortised cost using the eective inter-

est method;


29/40


Investments in equity instruments that do not have

a quoted market price in an active market and whose

air value cannot be reliably measured, are measured at

cost;

Other nancial assets, including derivatives, at air value,

without any deduction or transaction costs which may

be incurred on sale or other disposal.

Ater initial recognition, nancial liabilities are measured as

ollows:Financial liabilities, including derivatives that are liabili-

ties, are measured at air value through prot and loss;

Other nancial liabilities are measured at amortised cost

using the eective interest method.

1.4.3 Gains and losses

A gain or loss arising rom a change in a nancial asset or

nancial liability is recognised as ollows:

A gain or loss on a nancial asset or nancial liability clas-

sied as at air value through prot or loss is recognised

in prot or loss;

A gain or loss on an available-or-sale nancial asset is

recognised directly in equity, through the statement o

changes in equity, until the nancial asset is derecog-

nised, at which time the cumulative gain or loss previ-

ously recognised in equity is recognised in prot or loss;

Financial assets and nancial liabilities carried at

amortised cost: a gain or loss is recognised in prot

or loss when the nancial asset or nancial liability is

derecognised or impaired, and through the amortisa-

tion process.

1.5 Trade and other receivablesTrade and other receivables and accrued income are stated

at cost less provision or impairment losses.

1.6 Cash and equivalentsCash equivalents are short-term, highly liquid investments

that are readily convertible to known amounts o cash, and

are subject to insignicant risk in change in value.

Cash and cash equivalents are measured at air value.

1.7 Impairment o assetsThe company assesses at each balance sheet date whether

there is any indication that an asset may be impaired.

I any such indication exists, the company estimates the

recoverable amount o the asset.I there is any indication that an asset may be impaired,

the recoverable amount is estimated or the individual

asset. I it is not possible to estimate the recoverable

amount o the individual asset, the recoverable amount

o the cash-generating unit to which the asset belongs is

determined.

The recoverable amount o an asset or a cash-generat-

ing unit is the higher o its air value less costs to sell and

its value in use.

I the recoverable amount o an asset is less than its car-

rying amount, the carrying amount o the asset is reduced

to its recoverable amount. That reduction is an impairment

loss.An impairment loss o assets carried at cost less any

accumulated depreciation or amortisation is recognised

immediately in prot or loss. Any impairment loss o a

revalued asset is treated as a revaluation decrease.

An impairment loss is recognised or cash-generating

units i the recoverable amount o the unit is less than the

carrying amount o the units. The impairment loss is allo-

cated to reduce the carrying amount o the assets o the

unit in the ollowing order:

rst, to reduce the carrying amount o any goodwill allo-

cated to the cash-generating unit, and

then to the other assets o the unit, pro rata on the basis

o the carrying amount o each asset in the unit.

An entity assesses at each reporting date whether there is

any indication that an impairment loss recognised in prior

periods or assets other than goodwill may no longer exist

or may have decreased. I any such indication exists, the

recoverable amounts o those assets are estimated.

The increased carrying amount o an asset other than

goodwill attributable to a reversal o an impairment loss

does not exceed the carrying amount that would have

been determined had no impairment loss been recognised

or the asset in prior years.

A reversal o an impairment loss o assets carried at cost

less accumulated depreciation or amortisation other than

goodwill is recognised immediately in prot or loss. Any

reversal o an impairment loss o a revalued asset is treated

as a revaluation increase.

1.8 Trade and other payablesTrade and other payables are measured at amortised cost

using the eective interest method.

1.9 ProvisionsProvisions are recognised when the company has a present

legal or constructive obligation as a result o past events; it isprobable that an outfow o resources embodying economic

benets will be required to settle the obligation and a reli-

able estimate o the amount o the obligation can be made.


30/40


1.10 RevenueIncome rom grants is brought to account in the period to

which it relates. All other income is brought to account as

and when received. Interest is recognised on a time pro-

portion basis, taking account o the principal outstanding

and the eective rate over the period to maturity, when it is

probable that such income will accrue to the company.

1.11 Project accounting and expense allocationIn terms o its contractual obligations to donors, the com-

panys policy is to allocate project expenses that are clearly

identiable as such, directly against project unds.

Indirect and shared costs are either apportioned on the

basis o management estimates, or accounted or in the

management systems und, or recovered through either

the levy o a project implementation, consulting or admin-

istration ee.

Accrued and deerred grant income is based on the

balance o the project und ater taking into account the

direct, indirect and shared costs as described above. The

unexpended surplus o the project und is deerred to the

ollowing year or the decit is accrued in the year under

review.

2. MEMBERS GUARANTEE

In terms o the companys memorandum and articles o

association, the guarantee o each member in the event o

the company being wound up is R1. At the balance sheet

date, the guarantee value amounted to R9.

3. EQUIPMENT

Computer Oce Furniture

equipment equipment and ttings Total

R R R R

30 June 2009

Net book value 30 June 2008 63 286 31 008 3 917 98 211

A cs 179 845 105 548 6 715 292 108

Accumulad drciain (116 559) (74 540) (2 798) (193 897)

Addiins during h yar 46 508 2 735 49 243Drciain r h yar (31 312) (15 717) (1 343) (48 372)

Dissal asss (32 659) - - (32 659)

A cs (48 770) - - (48 770)

Accumulad drciain 16 111 - - 16 111


A cs 177 583 108 283 6 715 292 581


30 June 2008


A cs 164 758 105 548 6 715 277 021


Addiins during h yar 78 423 78 423

Drciain r h yar (36 364) (22 534) (1 343) (60 241)

Dissal asss (13 805) - - (13 805)

A cs (63 336) - - (63 336)

Accumulad drciain 49 531 - - 49 531

Net book value 30 June 2008 63 286 31 008 3 917 98 211A cs 179 845 105 548 6 715 292 108



31/40


2009 2008

R R

4. TRADE AND OTHER RECEIVABLES

Dsis 15 390 15 390

Advancs - 7 170

15 390 22 560

5. ACCRUED INCOME

Ciy tshwan subscriins (2007/8) - 329 423

Ryal Danish embassy (104.SAF.1.MFS.82.01) - 234 649SANeRI - 50 000

USAID/ISLGS - 65 000

Inrs rcivd - 56 069

Sanlam rund 7 330 -

7 330 735 141

6. CASH AND CASH EQUIVALENTS

Ndbank - Currn accun 1 176 984 87 783Ndbank - 32 day dsi 3 879 742 2 773 450

Ndbank - 3 mnh dsi - 12 473

Ndbank - 60 day dsi - 815 228

Ndbank - Call dsi - 10 442

Ndbank - Mny 24 Inv - 1 065 250

py cash 1 500 1 500

5 058 226 4 766 126

Cash at banks earn interest at foating rates based on daily bank deposit rates. Short-term deposits are made or vary-

ing periods o between one day and three months, depending on the immediate cash requirements o the entity, and

earn interest at the respective short-term deposit rates. The air value o cash and short-term deposits is R5 058 226

(2008: R4 766 126).


32/40


2009 2008

R R

7. TRADE AND OTHER PAYABLES

Accruals 1 569 457 1 485 152

ohr liabiliis 8 525 -

1 577 982 1 485 152

8. PROVISIONS

Leave

Lav ay is rvidd r whn i accrus mlys, wih rrnc srvics rndrd u h balanc sh da.

oning balanc 84 155 56 883

Addiins during h yar 33 201 27 272

Uilisd during h yar - -

Clsing balanc 117 356 84 155

Deferred compensation

prvisin r rnin sa 290 395 -

tal rvisin 407 751 84 155

9. DEFERRED GRANT INCOME

Wrld Bank (DGF Fil: 203108-07) 79 094 2 655 831

Darmn prvincial and Lcal Gvrnmn - NUDF 350 000 -

Darmn public Wrks 150 000 -

Ryal Danish embassy (104.SAF.1.MFS.82.01) 123 524 -

ekurhulni Mrlian Municialiy Sa Ciis rring 286 000 -

988 618 2 655 831


33/40


2009 2008

R R

10. GRANTS

Wrld Bank DGF Fil 203108-07 2 576 737 117 619

Rcivd 2 655 831 2 773 450

Drrd 2009 - (2 655 831)

Drrd 2010 (79 094) -

Darmn prvincial and Lcal Gvrnmn NUDF 2 263 798 -

Rcivd 2 613 798 -

Drrd 2010 (350 000) -

Darmn prvincial and Lcal Gvrnmn 4 700 000 4 400 000

Rcivd 4 700 000 4 400 000

Darmn public Wrks - -

Rcivd 150 000 -

Drrd 2010 (150 000) -

SIDA (U.11.11.3\SACN) - 361 812

Rcivd - 61 196

Drrd rm 2007 - 300 616

Ryal Danish embassy (104.SAF.1.MFS.82.01) 3 625 340 1 652 968

Rcivd 3 537 577 1 430 000

Accrud 211 287 11 681

Drrd 2010 (123 524) 211 287

Dvlmn Bank Suhrn Arica (DBSA10268) 150 000 -

Rcivd 150 000 -

ekurhulni Mrlian Municialiy Sa Ciis rring - -

Rcivd 286 000 -

Drrd 2010 (286 000) -

USAID / ISLGS - 92 488

Rcivd - 92 488

SANeRI - 265 000

Rcivd in 2008 - 265 000

Dvlmn Bank Suhrn Arica (SCF) - 250 000

Rcivd in 2008 - 250 000

13 315 875 7 139 887


34/40


2009 2008

R R

11. SUBSCRIPTIONS RECEIVED

Bual Ciy Municialiy 219 615 219 615

Ciy Ca twn 505 115 439 230

ekurhulni Mrlian Municialiy 378 836 329 423

thkwini Mrlian Municialiy 505 115 439 230

Ciy Jhannsburg 505 115 439 230

Mangaung Municialiy 219 615 219 615

Msunduzi Municialiy 219 615 219 615

Nlsn Mandla Mrlian Municialiy 329 423 329 423

Ciy tshwan 378 836 329 423

3 261 285 2 964 804

12. NET INTEREST RECEIVED

Inrs rcivd - call accuns 491 539 236 944

491 539 236 944

13. DIRECTORS REMUNERATION

Fr managrial srvics 1 068 304 809 078

14. OPERATING LEASE COMMITMENTS

SACN lass c sac vr a rid hr yars saring 1 July 2007. thcmany has cmmimns in rsc raing las chargs r rmissand c quimn as llws:

payabl wihin n yar 99 665 90 605

payabl wihin 2-5 yars - 99 665

99 665 190 270


35/40


2009 2008

R R

15. RECONCILIATION OF SURPLUS FROM OPERATIONSTO NET CASH FROM OPERATING ACTIVITIES

Surlus (dci) rm rains 775 843 (133 469)

Adjusmn r:

- drciain 48 372 60 243

- r n dissal asss (8 028) (15 628)

- inrs rcivd (491 539) (236 944)

- incras (dcras) in drrd incm (1 667 213) 1 255 215

- incras in lav rvisin 323 596 27 272

- incras in rvisin r drrd cmnsain 8 858 -

- dcras/(incras) in accrud incm 727 811 (423 985)

oraing cash fws br mvmns in wrking caial (282 300) 532 704

100 000 806 983

Dcras in accuns rcivabl 7 170 8 781

Incras in accuns ayabl 92 830 798 202

Cash (uilisd by) gnrad rm rains (182 300) 1 339 687

16. TAXATION

N rvisin r axain has bn mad as h cmany has qualid r xmin rm incm ax in rms scin10(1)(cN) as rad wih scin 30 h Incm tax Ac.

17. DEFICIT FOR THE YEAR

th dci r h yar is arrivd a ar aking in accun h

llwing:

Audirs rmunrain 48 467 30 139

Drciain 48 372 60 243

Sa css 3 819 782 2 872 752

oc rnal 90 879 90 879

Las aymn mad 90 605 82 296

Drrd aymn 275 8 583

pr n dissal cmur quimn (8 028) (15 628)


36/40


37/40


Detailed expenditure schedule or the yearended 30 June 2009

2009 2008

R R

Secretariat costs 4 561 137 3 369 958

Salaries 3 819 782 2 872 751

Oce consumables 377 153 404 947

Rn and srvics 90 879 90 936

Rnal c quimn 47 483 45 713

oc rrshmns 7 801 8 492

oc sundris 30 206 12 176

Cningn xnss - 25 337

Lss n rad-in c quimn - -

pr n dissal cmur quimn (8 028) (15 628)

psag and curir 9 025 15 414

travl - lcal (sa) 12 886 18 961

prining and sainry 33 805 14 277

Bank chargs 7 709 3 870

oc insuranc 32 328 36 055

Drciain 48 372 60 242

tlhn and cllhn 64 687 89 102

Financial and legal ees 50 092 34 756

Audi s and hr nancial srvics 48 467 30 139

Inrs aid n insalmn sal agrmn - -

Lgal s 1 625 4 617

Organisational development 314 110 57 504

organisainal dvlmn 84 941 50 431

Sa raining and dvlmn 11 500 7 073

prrmanc rviw mid-rm valuain 217 669 -

Networking and strategic input 267 257 226 792

Managmn and bard mings 70 099 86 910

Lcal and inrnainal cnrncs 120 467 58 087

Annual Rr 76 691 81 795

Inormation technology 81 262 76 828

It sur, mainnanc and inrn 67 584 68 776

Swar and licnss 13 678 8 052

City Development Strategies 4 682 734 894 692

Nainal Urban Dvlmn Framwrk 1 841 974 380 505

Susainabl Municial Financs in Suhrn Arica - 117 619

Sa Ciis Rr - lki 120 798 76 845

Urban Indicars 784 018 209 405

travl sur rgramms 128 808 110 318

2010 FIFA Wrld Cu lgacy rjc 325 926 -

Sragic acin larning r ladrshi dvlmn 1 243 006 -

Knwldg sharing nhancmn rjc 238 204 -

Balance carried orward9 592 390 4 568 270

cotinues over


38/40


Detailed expenditure schedule or the yearended 30 June 2009 (continued)

2009 2008R R

Balance brought orward 9 592 390 4 568 270

Productive Cities 242 339 1 267 109

Ciy rgins - 240 289

2010 Ciy Lgacy Rr - 733 507

Frigh lgisics sragy 242 339 293 313

Inclusive Cities 872 793 759 264

exandd public Wrks prgramm 251 185 246 274

Inclusiv Ciis cnrnc - 151 178

training r wnshi rnwal 293 496 -

Urban land marks 328 112 -

Cmmuniis racic HIV/AIDS - 361 812

Well-governed Cities 2 714 330 1 439 134

Urban dvlmn arnrshis - 504 150

Nainal Land transr Bill 52 663 49 248

Land us managmn - 65 750

Ass managmn 84 930 -

Susainabl Municial Financ in Suhrn Arica 2 576 737 -

Sa Ciy Financs - 819 986

Sustainable Cities 2 498 180 2 002 802

Annual Rr Susainabl Ciis Rrnc Gru (SCRG) 116 147 197 016

Guidanc r ciis - susainabl ransr sysms 141 066 30 000

prjc managmn 190 000 341 002

Urban envirnmnal Managmn (UeM) caching srvic r cuncillrsand snir managrs 113 825 446 215

Sminars n UeM hms - 628 885

envirnmnal Indicars - 75 924

UeM cnn rducin 365 654 151 760

Urban bidivrsiy 36 889 -

Susainabl was managmn 351 359 -

Grn by-laws and building sandards 312 821 -

Inrnainal clima chang crain 641 452 -

Wbsi udas Susainabl Ciis andrjc c-rdinain 228 967 132 000

Knowledge management and communications 1 278 174 791 339

Branding and marking marial - 71 558

Caaciy building ciis - 48 592

publicains 520 189 -

public rlains 38 920 123 632

Larning sssins 403 057 267 117

Wbsi mainnanc 316 008 280 440

17 198 206 10 827 918


39/40



40/40

South African Cities Network - Annual Report 2009

Documents

Transcript of South African Cities Network - Annual Report 2009