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DAWID KRUIPER MUNICIPALITY

OVERSIGHT REPORT 2017/2018

1. Introduction

The 2017/2018 draft Annual Report was tabled to Council on 29 January 2019 in compliance with the Municipal Finance Management Act (MFMA) which requires under section 127 (2) that:

“The Mayor of a municipality must, within seven months after the end of a financial year, table in the Municipal Council the annual report of the municipality.”

In dealing with the tabled draft Annual Report, Council is required to adopt an Oversight Report by not later than two months from the date of tabling, which for the 2017/2018 report will be 26 March 2019.

An oversight report should contain Councils’ comments on the annual report and must include under section 129 (1) of the MFMA a statement as to whether the Council:

a) Has approved the annual report with or without reservations;b) Has rejected the annual report; orc) Has referred the annual report back for revision of those components

that can be revised.

2. The Oversight Committee

The functions of the Oversight Committee are to: Undertake a review and analysis of the Annual Report Invite, receive and consider inputs from Councillors and Portfolio

Committees, on the Annual Report Consider written comments received on the Annual Report from the

public consultation process Allow the local community or any organ of the state to make

representations on the Annual Report Receive and consider the views and comments of the Councils’ Audit

Committee on the Annual Financial Statements and the Performance Report

Prepare the draft Oversight report, taking into consideration the views and inputs of the public, representatives of the Auditor General, organs of the state, Councils’ Audit Committee and Councillors.

According to the Terms of Reference of MPAC, one of the duties of MPAC is to make recommendations to Council when it adopts the oversight report on the annual report in terms of Section 129 of the Municipal Finance Management Act;

1The following Councillors were appointed as members of MPAC on 31 January 2017:

Cllr M Bosman Chairperson S DavidsBLB BosmanACC MorkelB KaloteF OlifantPSJ IsaacsPT van der SteenH RossK de WeeDJ Coetzee

3. 2017 / 2018 Annual Report Consultation Process

The community is advised through the printed media of the availability of the draft Annual Report and is invited to submit representations on the report.

The draft Annual Report is available at all municipal libraries and offices. The report is also placed on the Dawid Kruiper Municipal website. The draft Annual Report was also submitted to the Auditor General, National Treasury, Provincial Treasury and the Department of Local Government and Traditional Affairs.

The closing date for public submissions was 1st of March 2019.

4. Summary of Comments on the 2017 / 2018 Annual Report

4.1 Purpose of Annual Report

The purpose of the annual report as set out in MFMA Circular 32 is: To provide a record of the activities of the municipality or entity; To provide a report on performance in service delivery and budget; To provide information that supports the revenue and expenditure

decisions made; and To promote accountability in the local community for decisions made.

4.2 Comments on the Annual Report

On 27 August 2017 the combined Audit and MPAC Committees verified that in terms of the detail in the Annual Report, Internal Audit tested the information on a sample basis and found the following that needs to be corrected:

Dat kennis van die volgende uitwysings op die Finansiële State en Jaarverslag vir die 2017/2018 Finansiële Jaar geneem word:

2. Joint Audit Committee and MPAC’s Review notes of the Draft Annual report for the 2017/18 financial year

The Joint Audit and MPAC Committees verified that:

1. Chapter 1 of the Annual Report consist out of the: Component A: Mayor’s foreword.Component B: Executive Summary1.1. Municipal Manager’s overview.1.2. Municipal functions, population and environmental overview 1.3. Service delivery overview 1.4. Financial health overview1.5. Organisational Development overview 1.6. Auditor general report 1.7. Statutory Annual report process

2. Chapter 2 of the Annual Report consist out of the: 2.1. Political Governance 2.2. Administrative Governance2.3. Intergovernmental Relations 2.4. Public Meetings

2.5. IDP Participation And Alignment2.6. Risk Management.2.7. Anti-corruption and fraud2.8. Supply Chain Management2.9. By laws.2.10. Websites2.11. Public satisfaction on municipal services.

3. Chapter 3 of the Annual Report: 3.1. Water Provision 3.2. Waste Water (Sanitation) Provision3.3. Electricity3.4. Waste Management (This Section To Include: Refuse Collections,

Waste Disposal, Street Cleaning And Recycling)3.5. Housing3.6. Free Basic Services And Indigent Support3.7. Roads3.8. Transport (Including Vehicle Licensing & Public Bus Operation)3.9. Waste Water (Storm water Drainage)3.10. Planning3.11. Local Economic Development (Including Tourism And Market

Places)Component D: Community & Social Services 3.52 Libraries; archives; Museums; Galleries; Community Facilities;

Other (Theatres, Zoos, Etc.)3.55 Cemeteries and Crematoriums3.56 Child care, aged care, social programmes

Component E: Environmental protection3.60 Bio-diversity, landscape (including open spaces) and other (e.g.

coastal protection)

Component G: Security and Safety3.66 Fire3.67 Other (Disaster Management, Animal Licencing and Control,

Control of Public Nuisances And Other)Component H: Sport and Recreation3.68 Sport and RecreationComponent I: Corporate Policy Offices and Other Services3.69 Executive and Council3.70 Financial Services3.71 Human Resource Services3.72 Information and Communication Technology (ICT) Services3.73 Property; Legal; Risk Management and Procurement ServicesComponent K: Organisational Performance Scorecard

4. Chapter 4 of the Annual Report: 4.1 Employee Totals, Turnover and Vacancies4.2 Policies4.3 Injuries, Sickness and Suspensions4.4 Performance Rewards4.5 Skills Development and Training4.6 Employee Expenditure

5. Chapter 5 of the annual report include the following framework: Component A: Statements of financial performance 5.1. Statement of financial performance.5.2. Grants5.3. Asset Management.5.4. Financial ratios based on key performance indicators.Component B: Spending against capital budget5.5. Capital expenditure5.6. Sources of Finance5.7. Capital spending on 5 largest projects5.8. Basic service and infrastructure backlogs-overviewComponent C: Cash Flow Management and Investments5.9. Cash flow5.10. Borrowing and Investments5.11. Public Private Partnerships

Component D: Other financial matters

5.12. Supply Chain Management5.13. GRAP Compliance

6. Chapter 6 of the Annual report Component A: Auditor-General Opinion of Financial Statements Year 0Component B: Auditor-General Opinion Year 1 (Current Year)

7. Appendix A is included.8. Appendix B is included.9. Appendix C is included.10. Appendix D includes what constitutes a municipal function and the

applicable functions of the municipality.11. Appendix E on Ward Committees is included but is in incomplete12. Appendix F is included but the projects listed for 2017/18 do not reconcile

with IDP projects. 13. Appendix G is included but the heading refers incorrectly to 2016/17

financial year.14. Appendix H is not applicable for the municipality. 15. Appendix I is not applicable for the municipality. 16. Appendix J: Disclosures of financial interest is out-dated information as it

contains information of the previous Annual Report.17. Appendix K is not completed as it refers to 2016/17 financial year.18. Appendix L is not completed in terms of conditional grants received

except for MIG during the year.19. Appendix M is not completed as it refers to 2016/17 financial year which

must include the capital expenditure on new assets programme as well as

upgrade/renewal programmes and showing the actual of the prior year, the adjustment budget and actual expenditure in the current year.

20. Appendix N is not completed which must include all capital programmes by projects in the current financial year indicating the adjusted budget, actual in the current year and the variance.

21. Appendix O is not fully completed as it refers to 2016/17 financial year which must include all capital projects per ward in the current financial year and an indication if the work was completed or not. According to the progress report, 50% of the information is outstanding.

22. Appendix P is not completed as it refers to 2016/17 financial year which must include service connection backlogs at schools and clinics with their names and location.

23. Appendix Q is not completed as it refers to 2016/17 financial year which must include all service delivery backlogs experienced by the community where another sphere of government is responsible for providing the service.

24. Appendix R is not completed as it refers to 2016/17 financial year which must include the list all organisations or person in receipt of loans and grants from the municipality stating the nature of the projects funded, conditions attached and the rand value.

25. Appendix S is not completed as it refers to 2016/17 financial year which must list all monthly MFMA Section 71 budget statements not submitted in time.Outstanding information is due on the 23/08/2017.

26. Appendix T is not completed as it refers to 2016/17 financial year which should include national and provincial outcomes for local government

27. In terms of the detail in the Annual Report, the joint Audit Committee and MPAC tested the information on a sample basis and found the following that needs to be corrected:

Table Chapter FindingMunicipal Manager’s overview

1 Not correct as it reflects the same information as the 2016/2017 Annual Report.

Financial overview

1 Not correct as it reflects the same information as the 2016/2017 Annual Report (information from BTO not finalised yet).

T1.2 Municipal functions, populations and environmental overview

The statistical information in the Annual Report differs from the information in the approved IDP. The Annual Report still refers to information based on //Khara Hais en Mier while the IDP contains information for DKM. E.g total number of flush toilets connected to sewerage, weekly refuse removal, pipe water, household dynamics.

T1.4.1 1 Not correct as it reflects the same information as the 2016/2017 Annual Report.




Table Chapter FindingT 1.2.1 1.2 Municipal

functions, population and environmental overview

Key statistics – The information is the same as the 2016/17 AR. The information of 80/20 local government report was used.e.g. Type of dwellingtoilet facilitiespopulationhouseholds

T1.2.4 Socio economic status

Not correct as it reflects the same information as the 2016/2017 Annual Report.

T1.3.1 Service delivery introduction

Information 66% completed.

T1.3.2 Proportion of households with access to basic services


T1.3.3 Comment on access to basic services


T1.4.1 Chapter 2 – Financial overview


T1.4.2 Chapter 2 – Financial overview


T1.4.3 Chapter 2 – comments on financial ratios


T1.4.4 Comment on Operating Ratios


T1.4.5 Total Capital Expenditure


T1.4.5.1 Comment on Total Capital Expenditure

Not 100% correct as it part of the information reflects the same information as the 2016/2017 Annual Report.

T1.6.1 Auditor General Report


T1.7.1.1 Chapter 1 – Comments on Annual Report Process


T2.1.1 Political structure

Councillor Dubeni is being indicated as Chief Whip.It is understood by Internal Audit that Councillor Dubeni is the Chief Whip of a political party and not Council.Councillor L Stander is appointed from 1.10.2017.Councillor J Mei was appointed until 31.10.2017.Councillor H Ross was appointed from 1.12.2017.

T2.2.2 Senior Management structure

Not indicated that AJ Snyders was appointed from 1.02.2018.

Table Chapter FindingT2.4.3 Public Meetings No information for ward 11.T2.6.0 Overview of

Corporate governance


T2.7 Anti-fraud and corruption


T2.10.1 Chapter 2: Municipal Website : Content And Currency Of Material


T3.0.1 Service delivery performance


T3.1.2 Total use of water by sector (cubic meters)

According to the 2016/2017 Annual Report, the unaccountable water losses are 7098230. According to the 2017/2018 Annual Report, the unaccountable water losses for 2016/2017 is 7088230.

T3.1.4&

T3.5.2&

T3.4.3

Total households

According to T3.1.4 there is 25 295 households but according to T3.5.2 there is 23 245 households and according to T3.4.3 there is 13 households in formal settlements.

According to the IDP, there is 28 704 households.

T3.1.4&

T3.4.3

Total informal settlements

According to T3.1.4 there is 9525 informal households but according to T3.4.3 there is 13 households in informal settlements.

According to the approved housing sector plan, there is 9607 informal “units”.

T3.1.8 Financial Performances: Water Services


T3.2.1 Introduction to Sanitary Provision


T3.2.2&

T3.2.3

Sanitation Service Delivery Levels

Pit toilets (ventilated): T3.2.2 –2720 T3.2.3 - 2475T 3.2.3 - Flush toilet (with septic tank): AR of 2016/17 – 0.935 AR of 2017/18 in terms of 2016/17- 965T3.2.3 – Pit toilet (ventilated): AR of 2016/17 – 0 AR of 2017/18 in terms of 2016/17 - 2720T3.2.3 – Other toilet provisions: AR of 2016/17 – 2.679

AR of 2017/18 in terms of 2016/17 - 0T3.2.3 Sanitation

service delivery According to the IDP, 64.5% flush toilets are connected to sewerage. According to table

Table Chapter Findinglevels 3.2.3 18 973 toilets are connected which

results in 71.66%.T3.2.4 Households -

Sanitation Service Delivery Levels below the minimum

Formal settlements:AR of 2016/17

Formal settlements:AR of 2017/18 in terms of 2016/17 information

Total households : 15621 18973

Households below minimum service level : 15280

0

Proportion of households below minimum service level: 81%

0%

Informal settlements:AR of 2016/17

Formal settlements:AR of 2017/18 in terms of 2016/17 information

Total households: 4.059 9258

Households below minimum service level : 3.749 4284

Proportion of households below minimum service level: 92%

24%

T3.2.5 Access to Sanitation

AR of 2016/17: 22587AR of 2017/18 in terms of 2016/17: 22658

T3.2.6 Waste Water (Sanitation) Service Policy Objectives Taken From IDP

AR of 2016/17: 740 additional HHS (2221 HHS remaining)AR of 2017/18 in terms of 2016/17: 3300 additional HHS (3300 HHS remaining)

T3.2.7 Employees: Sanitation Services

Information of 2017/18 is the same as information of 2016/17 AR.

T3.2.8 Financial Performance 2015/2016 : Sanitation Services


T3.2.9 Capital Expenditure 2015/2016 : Sanitation Services


T3.2.10 Comment on Sanitation Services Performance Overall


Table Chapter FindingT3.2.3 and

T1.2.1Chapter 1: Introduction to background dataChapter 3 – services delivery performance

According to T1.2.1 there are 3300 households with a bucket toilet.According to T3.2.3 there are 3554 bucket toilets.According to T5.8.4 there are approximately 2000 bucket toilets remaining after 3600 households was provided with water.

T1.2.4 Chapter 1 – housing backlog

According to the template there is no information available.

T3.3.1 Introduction to electricity


T3.3.2 Introduction to electricity


T3.3.3 Electricity service delivery levels


T3.3.4 Households – electricity levels below the minimum


T3.3.5 Electricity service policy objectives taken from IDP


T3.3.7 Financial performance: Electricity services


T3.3.8 Capital expenditure – Electricity


T3.3.9 Comments on electricity services overall performance


T3.4.1 Introduction to waste management


T3.4.2 Solid waste service delivery levels


T3.4.3 Solid waste service delivery levels below the minimum


T3.4.7 Financial performance - Solid waste management services


T3.4.8 Financial performance - Waste disposal and other services


Table Chapter FindingT3.4.9 Capital

expenditure – waste management services


T3.5.2 Percentage of households with access to basic housing

According to table, there is a total of 23 245 households (including formal and informal settlements) of which 22 529 is households in formal settlements.

According to this information, there are only 716 informal settlements which seem to be incorrect.

According to table T3.1.4 there is 9 525 informal settlements.

T3.5.5 Financial performance – housing


T3.5.6 Capital expenditure – housing


T3.6.1 Chapter 3 - Introduction to free Basic Services and Indigent Support


T3.6.2 Free Basic Household Services


T3.6.3 Free Basic Services to Low Income Households


T3.6.4 Financial Performance 2015/2016: Cost to Municipality of Free Basic Services Delivered


T3.6.5 Free Basic Service Policy Objectives taken from IDP


T3.6.6 Comment on Free Basic Services and Indigent Support


T3.7.0 Introduction to road transport


T3.7.1 Chapter 3 – Introduction to roads

Not 100% correct as it part of the information is incomplete.

Table Chapter FindingT3.7.2 Chapter 3 –

Introduction to roads

Gravel road infrastructure – Gravel road graded (maintenance)AR of 2016/17: 46AR of 2017/18 in terms of 2016/17: 44

T3.7.8 Financial performance – Road services


T3.7.9 Capital expenditure – Road services


T3.9.1 Introduction to Storm water Drainage

Information of 2015/16 annual report.

T3.10.0 Introduction to Planning and Development


T3.10.1 Introduction to planning


T310.5 Financial performance – planning services


T3.10.6 Capital expenditure – planning


T3.11.5 Jobs created through LED initiatives


T3.11.6 Jobs created through EPWP projects

EPWP projects:AR of 2016/17: 0AR of 2017/18 in terms of 2016/17: 1

Jobs created:AR of 2016/17: 0AR of 2017/18 in terms of 2016/17: 40

T3.11.7 Local Economic development objectives from IDP


T3.11.9 Financial performance – LED


T3.52.2 Service statistics for libraries, archives, museums, galleries, community facilities, other

The information in the Annual Report and Annual Performance Report differs with regards to materials issued and outreach programmes:AR APRMain Library: 19 611

Main Library: 15 611

Rosedale: 9 434 Rosedale: 9 8963 programmes 4 programmes

T3.52.2 Service statistics for libraries, archives, museums,

Programmes refers to July 2016 till June 2017 which is actually in terms of 2016/17 AR.

Table Chapter Findinggalleries, community facilities, other

T3.52.5 Financial performance – libraries, archives, museums, galleries, community facilities, other


T3.52.6 Capital expenditure – libraries, archives, museums, galleries, community facilities, other


T3.55.5 Financial performance – cemeteries and crematoriums


T3.52.6 Capital expenditure – cemeteries and crematoriums


T3.65.0 Component G – security and safety


T3.66.1 Introduction to fire services


T3.66.2 Fire services data

Not 100% correct as it part of the information is incomplete e.g previous years.

T3.66.3 Fire service policy objectives taken from IDP


T3.66.5 Financial performance – Fire services


T3.66.6 Capital expenditure – Fire services


T3.66.7 Comment on overall performance of fire services


T3.67.1 Introduction to Disaster management, Parking Area Development and Traffic Services, Etc.


Table Chapter FindingT3.67.5 Financial

Performance 2016/17: Disaster Management, Parking Area Development and Traffic Services, Etc.


T3.67.6 Capital expenditure - Disaster Management, Parking Area Development and Traffic Services, Etc.


T3.68.4 Financial performance – sport and recreation


T3.68.5 Capital expenditure – sport and recreation


T3.69.0 Introduction to corporate policy offices


T3.69.1 Introduction to executive and council


T3.69.2 Service statistics for executive and council


T3.69.5 Financial performance – executive and council


T3.69.6 Capital expenditure – executive and council


T3.69.7 Comment on performance of executive and council


T3.70.1 Introduction to financial services


T3.70.2 Debt recovery Not correct as it reflects the same information as the 2016/2017 Annual Report.

T3.70.2.1 Concern 3.70.2 Not correct as it reflects the same information as the 2016/2017 Annual Report.

T3.70.3 Financial service


Table Chapter Findingobjectives taken from IDP

T3.70.5 Financial performance – financial services


T3.70.6 Capital expenditure – financial services


T3.70.7 Comment on performance of financial services overall


T3.71.3 Human resource policy objective taken from IDP


T3.71.5 Financial performance – human resources


T3.71.6 Capital expenditure – human resources


T3.71.7 Comment on performance of human resource overall


T3.72.1 Introduction to information and communication technology (ICT) services


T3.72.2 Service statistics for ICT services


T3.72.5 Financial performance – ICT services


T3.72.6 Capital expenditure – ICT services


T3.73.5 Financial performance – property and other admin


T3.73.6 Capital expenditure – property and other admin


Component K Organisational scorecard


T4.1.3 Turnover rate – terminations for financial year

According to template 28 officials left but according to BIQ system a total of 32 left.

Table Chapter FindingT4.5.3 Skills

development expenditure

No information in template.

T4.6.2 Number Of Employees Whose Salaries Were Increased Due To Their Positions Being Upgraded

No information in template.

T5.1 Statement of financial performance


T5.1.2 Financial Performance of operational Services


T5.1.3 Comment on financial performance


T5.2.1 Grant performance


T5.2.2. Comment on operating transfers and grants


T.5.2.3 Grants received from other sources other than DORA


T5.2.4 Comment on conditional grants and grants received from other sources


T5.3.1 Introduction to asset management


T5.3.2 Treatment of 3 largest assets


T5.3.3 Comments on asset management.


T5.3.4 Repair and expenditure


T5.3.4.1 Comment on repair and maintenance expenditure


T5.4.9. Financial ratios based on key performance indicators


Table Chapter FindingT5.5.0 Component B –

introduction to spending against capital budget


T5.5.1 Capital expenditure


T5.6.1 Sources of finance


T5.6.1.1 Comments on sources of funding.


T5.7.1 Capital spending on 5 largest projects


T5.7.1.1 Comments on capital spending


T5.8.1 Introduction to basic service and infrastruc-ture backlogs


T5.8.2 Service backlogs Not correct as it reflects the same information as the 2016/2017 Annual Report.

T5.8.4 Comment on backlogs


T5.9.0 Introduction to cash flow management and investment


T5.9.1 Cash flow outcomes


T5.9.1.1 Comment on cash flow outcomes


T5.10.1 Introduction on borrowing and investments


T5.10.2 Actual borrowing


T5.10.3 Actual borrowing


T5.10.4 Municipal and entity investments


T5.10.5 Comments on borrowing and investments


T6.0.1 till T6.2.5 Chapter 6 Not correct as it reflects the same information as the 2016/2017 Annual Report. Audit outcome released during November 2017.

On 22 January 2019 MPAC discussed the Annual Report for the 2017/2018 financial year and made the following findings:

1. Dat die Konsepjaarverslag van Munisipaliteit Dawid Kruiper vir die 2017/2018 boekjaar in beginsel goedgekeur word en aan die publiek vir insette en kommentaar beskikbaar gestel word.

4.3 Comments on the Annual Report

The report was approved in principle

4.4 Council Resolution

Council resolved on 26 March 2019 as follows:

1Dat die MPAC-oorsigverslag rakende die 2017/2018 Jaarverslag (soos gewysig) aanvaar word.

5. Declaration in terms of Section 129 of the MFMA

It is hereby declared that, in terms of section 129 of the MFMA, the Annual Report be approved without reservations.

RECOMMENDATION

1. That Council considers the Annual Report of the municipality for the 2017/2018 financial year and representation thereon, and adopts the oversight report as compiled by the Oversight Committee (MPAC) together with the Annual Report.

2. That the Oversight Report be made public in accordance with section 129 (3) of the MFMA 56 of 2003;

3. That the Oversight Report be submitted to provincial legislature in accordance with section 132 (2) of the MFMA 56 of 2003.

4. That it be noted that all the amendments, that is mentioned in the report, was included in the final Annual Report

___________________________Cllr M BOSMANCHAIRPERSON: MPAC

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