4.1. To obtain approval for the Adjustment Operating Budget for the 2017/18 financial year.

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1 4.1 4 ADJUSTMENT OPERATING BUDGET FOR THE 2017/18 FINANCIAL YEAR 1 STRATEGIC THRUST Well Governed and Managed City. 2 OBJECTIVE To obtain approval for the Adjustment Operating for the 2017/18 financial year. 3 SUMMARY In terms of Section 28 of the Municipal Finance Management Act 56 of 2003 (MFMA), a municipality may revise an approved budget through an adjustments budget. Only the Mayor may table an adjustments budget in the municipal council and may only be tabled within prescribed limitations as to timing or frequency. In terms of section 28 of the Municipal Finance Management Act, an adjustment budget, amongst others: (a) Must adjust the revenue and expenditure estimates downwards if there is material under-collection of revenue during the current year; (b) (c) (d) (e) (f) May appropriate additional revenues that have become available over and above those anticipated in the annual budget, but only to revise or accelerate spending programmes already budgeted for; May, within a prescribed framework, authorise unforeseeable and unavoidable expenditure recommended by the mayor of the municipality; May authorise the utilisation of projected savings in one vote towards spending under another vote; May correct any errors in the annual budget May provide for any other expenditure within a prescribed framework. In terms of Municipal and Reporting Regulations, only one adjustment budget may be tabled in Council during the financial year, after tabling of the mid year budget and performance assessment, but not later than 28 February.

2 4.2 MID TERM ASSESSMENT Section 72 of MFMA also stipulate that the Accounting Officer must by 25 January of each year assess the performance of the municipality during the first half of the financial year and as part of the assessment or review recommend whether the adjustment budget is necessary. A report on the assessment of service delivery performance is submitted separately by Group Strategy, Policy and Relations to Mayoral Committee and Council. Mid-year operating expenditure and revenue assessment (as at 31 December 2017) The actual year to date direct revenue is under budget by 8% (R2 billion) and the actual direct operating expenditure is also under budget by 6% (R1.5 billion). The nett operating result is an operating deficit R2.4 million against a year to date budgeted surplus of R616.2 million before capital transfers and tax. Based on the mid-year results the overall operational performance of the City is behind the budgeted performance from a financial perspective. Table 1: A summary of revenue versus expenditure for the period ending 31 December 2017 YTD Actual Approved YTD Percentage Full Year Approved Results YTD Variance Variance Forecast Variance Nov-17 Jun /18 R'000 R'000 R'000 % R'000 R'000 R'000 Revenue Direct Revenue ( ) (8) Internal Transfers ( ) (19) Total Revenue ( ) (9) Expenditure Direct Expenditure ( ) (6) Internal Transfers ( ) (17) Total Expenditure ( ) (7) Operating (Deficit)/Surplus before tax ( ) (100) Transfers Recognised Capital and Contributions ( ) (70) Less Tax ( ) (89) Surplus/(Deficit) ( ) (77) OPERATING ADJUSTMENT BUDGET FOR 2017/18 Assumptions on the adjustment budget: Revenue Revenue was adjusted where necessary in line with the mid-year operating expenditure and revenue assessment; Additional grant funding (both revenue and expenditure) was allocated;

3 4.3 Expenditure reallocations up to the end of December 2017 have been taken into account; Reallocation between revenue and expenditure categories were allowed where bottom line is not affected; Expenditure was adjusted downwards to mitigate the reduction in revenue and collection levels in line with mid-year performance; Projected savings in one vote have been reprioritised towards spending under another vote in order to accelerate projects aligned to the Mayoral Priorities. Depreciation is allowed in line with the mid-year financial performance report; Internal charges adjustment between departments were allowed (bottom line is not affected); and The adjustment budget is not meant to address additional funding requirements and accordingly departments and municipal entities will be required to reprioritise within their existing budget allocations to address any service delivery pressure. Additional budget request during the adjustment budget process Additional budget requests in excess of R770 million were made by the various core departments and municipal entities within the current financial year. Due to budgetary constraints and to protect the bottom-line of Council many of the requests could not be accommodated in the adjustment budget. Where these requests were of a non-critical nature yet aligned to the Mayoral Priorities, departments and entities were requested to defer them to 2018/19. It is recommended that departments and entities manage its expenditure within the adjusted budget allocation to ensure that it does not overspend its adjusted budget allocation. Overview of the Operating Adjustment In May 2017 Council approved operating revenue of approximately R48.6 billion and operating expenditure of approximately R47.3 billion (excluding internal transfers and taxation) for the 2017/18 financial year. In the 2017/18 Adjustment the revenue budget reduces by R926.4 million and expenditure budget reduces by R459.1 million. The net effect of the adjustments results in a surplus (before capital transfers and taxation) of R786.3 million compared to the original budgeted surplus of R1.3 billion.

4 4.4 Adjustments - Financial Performance The table below reflects the high level summary of the proposed adjustment budget; Approved Adjusted Adjustments 2017/ /18 R 000 R 000 R 000 Revenue ( ) Internal Revenue ( ) ( ) Expenditure ( ) Internal Expenditure ( ) Surplus (Deficit) before capital grants and contributions ( ) ( ) Capital Grants and contributions ( ) Surplus (Deficit) after capital grants and contributions ( ) Taxation (44 075) Surplus (Deficit) after taxation and capital grants and contributions ( ) The table below reflects the summary of adjustments made to the revenue budget; Description Current Year 2017/18 R thousand Approved Adjustments Adjusted R 000 R 000 R 000 Revenue By Source Property rates Serv ice charges - electricity rev enue ( ) Serv ice charges - w ater rev enue ( ) Serv ice charges - sanitation rev enue ( ) Serv ice charges - refuse (16 233) Serv ice charges - other (38 113) Rental of facilities and equipment Interest earned - ex ternal inv estments Interest earned - outstanding debtors Fines, penalties and forfeits ( ) Licences and permits Agency serv ices (17 600) Transfers and subsidies receiv ed Other rev enue Gains on disposal of PPE Revenue ( ) Internal Transfers ( ) Total Revenue ( )

5 4.5 The adjustment on the revenue is mainly as a result of the following: - Service charges electricity decrease by R443 million mainly due to the financial impact of the changes in attainable non-technical losses; - Service charges water decrease by R300.7 million in line with mid-year performance; - Service charges sanitation decrease by R128.9 million in line with mid-year performance; - Service charges refuse decrease by R16.2 million due to an increase in the number of indigent customers; - Service charges other decrease by R38.1 million and it relates to: - Pikitup s other revenue increase by R15.4 million due to an increase in the City s cleaning levy as a result of billing additional properties; and - Parks and Zoo s service charges decreased by R53.5 million as a result of discontinued external services model due to the centralized grass cutting program (R51.1 million) as well as reduced cemetery fees in line with mid-year performance (R2.4 million). - Rental of facilities and equipment increases by R466 thousand and it mainly relates to: - Johannesburg Property portfolio account decreased by R10.9 million due to expired leases; - Johannesburg Roads Agency increases by R3.9 million due to the allocation of the budget to the correct revenue line item; - Joburg Market increases by R3.4 million due to the projected increase in rental income; and - JOHSCO increases by R4.7 million due increased billing as a result of the increase in the number of rental units with the completion of the Hoek street, Phoenix House, and the Kerk Street projects. - Interest earned (external investments) of Joburg Theatres increases by R1 million in line with mid-year performance; - Interest earned (outstanding debtors - Pikitup) increases by R567 thousand in line with mid-year performance; - Fines decrease by R194 million due to the reduction in electronic speed enforcement Administrative Adjudication of Road Traffic Offences (AARTO 3) with the expiry of the speed law enforcement contracts;

6 4.6 - Licensing and permits increased by R1.2 million due to concession fees from EnerG Systems for conversion of methane gas to generate electricity; - Agency services decreased by R17.6 million and it relates to - Johannesburg Development Agency (JDA) decreases by R4.6 million in line with the Agency s mid-year revenue performance; and - Joburg Market decreases by R13 million due to price stabilisation in the market and drought is no longer having an upswing on prices as it happened during the drought seasons last year; - Operating grants increase by R201.8 million and it mainly relates to - Environment, Infrastructure and Services (EISD) increase by R13.8 million as a result of the following: - R1.2 million reduced due to EPWP grant transferred to JMPD; and - R15 million increased as a result of a gazetted grant allocation from Department of Energy in respect of Energy Efficiency and Demand Side Management Programme. - Transport decreases by R63 million due with the Public Transport Network Operating Grant (PTNOG) being allocated to the capital portion of the Public Transport Infrastructure Grant; - Health decreases by R384 thousand as a result of the HIV and AIDS grant reduction as per the revised gazette received from Province; - Housing increases by R265.1 million due to the increase in the housing top structure subsidy from the Gauteng Provincial Department of Human Settlements; - Public safety increases by R1.2 million being a transfer from EISD to the Johannesburg Metropolitan Police department; and - City Power reduces by R15 million due to a correction of the budget as EISD is reflecting the gazetted amount of R15 million. - Other revenue increases by R7.1 million and it mainly relates to - Transport reduces by R10 million due lower passenger numbers than anticipated; - Public Safety increases by R14 million due to increases in stadium events management fees; - Johannesburg Property Portfolio account reduces by R5.8 million due to the nonperformance on the recovery of outdoor advertising; - Pikitup reduces by R1.5 million in line with mid-year performance; - Johannesburg Roads Agency reduces by R3.9 million in line with mid-year performance; - Johannesburg Property Company decreases by R14.6 million due to the correction of revenue in line with mid-year performance; and - Metropolitan Trading Company (MTC) increases by R26.3 million due to projects of IT equipment that will be installed for new clients. Internal transfers decrease by R324 million on both revenue and expenditure however the bottom-line of the City is not affected. The table below reflects the summary of adjustments made to the expenditure budget;

7 4.7 Description Current Year 2017/18 R thousand Approved Adjustments Adjusted Expenditure By Type R 000 R 000 R 000 Employ ee related costs ( ) Remuneration of Councillors Debt impairment (94 545) Depreciation and asset impairment (45 031) Finance charges Bulk purchases Repairs and maintenance ( ) Other materials Contracted serv ices ( ) Transfers and subsidies paid Other ex penditure Contributions to/(from) prov isions (53 484) (3 489) (56 973) Loss on disposal of PPE Expenditure ( ) Internal Transfers ( ) Total Expenditure ( ) The adjustment on the expenditure resulted from the following; Decrease in employee related cost by R359.2 million and it mainly relates to - Transport increases by R7.1 million to compensate the Rea Vaya BRT station employees for overtime worked but not paid. The report for the compensation was approved by Mayoral Committee; - Community Development increases by R4.3 million being budget transfers for the funding of the annual Joburg carnival (R1.3 million), staffing of libraries (R631 thousand and uniforms and protective clothing (R1.2 million). Further there was budget transfer from Group Corporate and Shared Services for salaries parity adjustments (R1.1 million); - Health decreases by R21.7 million mainly due to the following: - R16.8 million transferred to Social Department for implementation of the Substance Abuse Program; - R5 million transferred to other expenditure for guarding of properties, printing and stationary and hire and maintenance of equipment; and - R100 thousand increased to cater for the salary parity adjustment. - Social Development increases by R17.9 million as a result of R16.7 million transfer from the Health Department for Substance Abuse Program and R1.2 million to cater for the salary parity adjustment;

8 4.8 - Group Information and Communication Technology increases by R58.7 million mainly due to a transfer of budget from GCSS; - Group Finance decreases by R27.7 million. The R1.6 million was transferred to cover the salaries of interns appointed to assist with the compliance in the finance section, R609 thousand was transferred from GSCC to address salary disparities among employees and R29.3 million transferred between line categories; - Group Corporate and Shared Services decrease by R199.6 million due to discontinuation of the strategic appointments budget in the current year (R103.2 million), balance of budget transfer to GICT (R58.6 million), transfer to other Departments and Entities for salary parity adjustments (R34.5 million) and a budget re-basing (R3.2 million); - Housing decreases by R12.5 million due to projected savings being reallocated to other expenditure for the payment of utility charges; - Development Planning decreases by R5.6 million mainly due to the reduction of expenditure to be in line with mid-year performance (R4.5 million), decrease in the Alexandra Renewal project charge out (R1.3 million) offset by an increase of R197 thousand being salary parity adjustment; - Public Safety decreases by R62.2 million mainly due to the reallocation of budget to cover other expenditures relating to the hiring of the 1500 Metro Police Officers (MPO s); - Johannesburg Water increases by R3.8 million as a result of R3.5 million to fill critical positions and R268 thousand to cater for the salary parity adjustment; - Pikitup decreases by R104.2 million mainly due to the following: - R107.1 million reduced as a result of unfilled vacancies and alignment of expenditure in line with revenue performance; and - R2.9 million increased to cater for the salary parity adjustment. - Johannesburg Roads Agency increases by R3.4 million due to the salary parity provision from Group Corporate and shared Services; - Metrobus decreases by R5.4 million due to savings realised on overtime worked. Management has put systems in place to ensure overtime is reduced; - Johannesburg Development Agency increases by R3.8 million being the salary parity adjustment (R2.4 million) and budget transfer from internal charges (R1.3 million) being Alexandra Renewal Project employment costs; - Metropolitan Trading Company decreases by R35.2 million due to moratorium issued to halt the recruitment process until viability study has been completed and to mitigate the reduction in revenue; - JOSHCO increases by R2.8 million to address capacity constraints brought about by the growth of the entity; and - Joburg City Theatres increase by R12.3 million mainly to budget transfer from other expense categories (R9.5 million) being hospitality and catering employee costs and the salary parity adjustment (R2.7 million). - The provision for debt impairment decreases by R94.6 million. - Housing increases by R13 million in line with mid-year performance; - Public Safety reduces by R194 million in line with the reduction in revenue traffic fines;

9 4.9 - City Power increases by R92.1 million in line with mid-year performance; - Pikitup reduces by R8 million in line with mid-year performance; and - JOSHCO increases by R2.3 million to provide for the potential low collection rate due to adverse economic conditions and high level of unemployment impacting the tenants. - Depreciation in total reduces by R45 million, however there were adjustments made within the budgets of the various departments and municipal entities in line with mid-year performance; - Repairs and maintenance decrease by R163.9 million and it mainly relates to - - Economic Development increases by R12 million to provide for on the job artisan training; - Transport decreases by R53.9 million mainly due to the corresponding reduction in expenditure with the transfer of the R63 million PTNOG to capital expenditure; - Ombudsman decreases by R1.3 million in respect of savings identified; - Group Corporate and Shared Services decrease by R1 million being budget transfer to GICT (R815 thousand) and budget re-basing (R188 thousand); - Housing increases by R33.7 million for the upgrade of the Diepkloof, Dube and Meadowlands hostels funded through the Gauteng Department of Housing Settlements grant; - Public Safety increases by R21.5 million to repair the Veritas school to meet the JMPD training facility standards for the training of the 1500 Metro Police Officers; - Johannesburg property portfolio account decreases by R11.4 million as a result of the alignment of expenditure in line with revenue performance; - City Power decreases by R111.1 million as a result of the alignment of expenditure in line with revenue performance; - Johannesburg Water decreases by R5.2 million as a result of the alignment of expenditure in line with revenue performance; - Pikitup increases by R2.7 million due to planned maintenance programme for depots, garden sites and landfills; - Johannesburg Roads Agency decreases by R10 million. JRA is moving the head office and therefore repairs and maintenance has been minimal for the current year; - Metrobus decreases by R23.7 million mainly as a result of savings realised on this line item due to the scrapping and disposal of old buses; - Johannesburg Parks and Zoo decreases by R14.8 million as a result of a transfer to other expenditure to cater for the grass cutting program; and - Johannesburg Development Agency decreases by R1.7 million mainly due to identified savings. - Bulk water purchases remain the same at R15.4 billion. - Contracted services decrease by R111.9 million mainly due to the following: - Economic Development decreases by R4 million due to savings identified; - EISD reduces by R14.3 million mainly due to the following:

10 R15.6 million reduced as a result of the alignment of expenditure in line with revenue performance; - R1.2 million reduced due to EPWP grant transferred to JMPD; and - R2.5 million increase due to gazetted grant allocation in respect of Energy Efficiency and Demand Side Management Programme for energy balance and education awareness.. - Transport decreases by R60.3 million due to the reallocation of R26.9 million to other expenditure and R33.4 million savings realised on the expenditure for the management of cycle lanes, the procurement of the quality management system, the restructuring of Metrobus and the reduction of expenditure in line with revenue performance; - Social Development increases by R4 million due to budget transfer from other expenditure for cleaning contracts, contract cell and policy reviews; - Group Forensic Investigation Services increased by R67.3 million to cover shortfall for consultants on pending investigations into alleged corruptions within the City; - City Manager decreases by R45.4 million due to movements of funds between line categories, R7 million was transferred to Community Development for carnival event and savings identified; - Speaker: Legislative Arm of Council increases by R3.2 million in order to cater for cleaning of regional offices and fleet cost for public transportation for events such as Summits, SOCA, speech and Oversight visits; - Group Information and Communication Technology increases by R218.4 million due to budget transfer from GCSS; - Other expenditure increased by R68.7 million being budget transfer from GCSS; - Group Finance increases by R17 million to cover a shortfall on key prioritized project of General Valuation (GV) Roll 2018 in order to comply with the MPRA as the directorate is required to undertake general valuation at least once every four years; - Group Corporate and Shared Services decrease by R218.8 million due to a budget transfer to GICT (R218.7 million) and budget re-basing (R127 thousand); - Housing increases by R11.8 million for the relocations and management of informal settlements; - Development Planning increases by R14.4 million to provide for land acquisition security cost portion (R9.8 million), bulk contribution framework R2 million, general security R1.2 million and R2 million for rezoning and consolidation costs offset by (R622k) to align expenditure with revenue performance of the City; - Public Safety increases by R24.1 million to provide for fleet costs for the transportation of Security guards in terms of the insourcing of security and the transportation of the 1500 MPO trainees to and from the training academy; - Johannesburg property portfolio account increases by R15.5 million in line with midyear performance; - City Power decreases by R90.5 million as a result of the alignment of expenditure in line with revenue performance; - Johannesburg Water decreases by R37.2 million as a result of the alignment of expenditure in line with revenue performance; - Pikitup decreases by R1.3 million due to a reduction in third party contractors; - Johannesburg Roads Agency decreases by R10 million as a result of the alignment of expenditure in line with revenue performance;

11 Metrobus decreases by R3.2 million due to challenges on the use of the current Oracle financial system; - Johannesburg Parks and Zoo decreases by R5.3 million as a result of a transfer to other expenditure to cater for the grass cutting program; - Johannesburg Development Agency decreases by R1.6 million due to movement of funds between categories; and - Metropolitan Trading Company decreases by R8.5 million to mitigate the reduction in revenue. - Transfers and subsidies paid increases by R210.6 million and it mainly relates to - Economic Development decreases by R22 million due to projects proposed for implementation not qualifying to be funded from grants; - Community Development increases by R5 million being a transfer from other expenditure for sponsorships to various non-governmental organizations; - Health decreases by R2 million due to budget transfer to other expenditure for training courses and group activities; - Social Development decreases by R2 million as a result of the alignment of expenditure in line with revenue performance; and - Housing increases by R231.4 million in line with the housing top structure grant received. Other expenditure increases by R120.1 million mainly due to the following: - Economic Development increases by R10 million reallocated from transfers and subsidies paid to other expenditure for the establishment of opportunity centres; - Transport increases by R76.4 million as a result of the R26.9 million reallocation from contracted services, and the R49.5 million required for the security and cleaning of public facilities and Rea Vaya bus stations; - Community Development increases by R5 million being a transfer of funds to grants and subsidies paid (R5miilion) and transfer to employee related costs (R3.2 million) offset by a transfer of funds from the Office of the City Manager for the Joburg carnival (R7 million) and a transfer of (R10 million) to Joburg City Theatres for the hosting of the Arts Alive Festival; - Health increases by R2.5 million mainly due to the following: - R7 million budget transfer from employee related costs (R5 million) and subsidies paid (R2 million); - R1.2 million transferred to Social Development s operational capital to acquire equipment for the implementation of the Substance Abuse Program; - R2.9 million reduced as a result of the alignment of expenditure in line with revenue performance; and - R384 thousand reduced as a result of the HIV and AIDS grant reduction. - Social Development decreases decreased by R8.1 million due to R4 million transferred to contracted services; R4.2 million reduced as a result of the alignment of expenditure in line with revenue performance and R80 thousand transfer from Health Department for telephone lines;

12 Ombudsman decreases by R6.5 million due to movements of funds between line categories, savings identified to align expenditure with revenue performance; - City Manager increases by R9.1 million due to movements of funds between line categories in order to cover shortfall on legal expenses, rental at 222 smith occupied by special projects, leased floors at Traduna Building and SAPPI, training, printers and maintenance of photocopiers and implementation and hosting of iris; - Speaker: Legislative Arm of Council decreases by R9.2 million due to movements of funds between categories and also due to savings identified to align expenditure with revenue performance; - Group Information and Communication Technology increases by R68.7 million being budget transfer from GCSS; - Group Finance increases by R53.3 million, R1.6 million was transferred between categories and additional R55 million required for ATTCOL in order to recover long outstanding debts; - Group Corporate and Shared Services decrease by R89.1 million due to budget transfer to GICT (R68.4 million) and budget re-basing (20.7 million); - Housing increases by R84.3 million for the management of informal settlements and to address the shortfall on utility charges for council owned hostels; - Development Planning reduces by R2.1 million to align expenditure with revenue performance of the City; - Public Safety increases by R119.7 million to provide for the guarding of municipal properties, the hire and maintenance of equipment, printing and stationery, stores and material; - Johannesburg property portfolio account decreases by R20.8 million in line with midyear performance; - City Power decreases by R51.5 million as a result of the alignment of expenditure in line with revenue performance; - Johannesburg Water decreases by R32 million as a result of the alignment of expenditure in line with revenue performance; - Pikitup decreases by R12.1 million due to a reduction in registration fees, seminars, conferences and workshops, engagement of consultants, public relations and disposal fees; - Johannesburg Roads Agency decreases by R10 million to align expenditure with revenue performance of the City; - Metrobus decreases by R2 million due to the reduction in hire of equipment; - Johannesburg Parks and Zoo decreases by R31 million mainly due to the following: - R45 million reduced due to discontinued external services model; - R6 million reduced as a result of the alignment of expenditure in line with revenue performance; and - R20 million increased due to budget transfers from repairs and maintenance as well as contracted services. - Johannesburg Development Agency decreases by R1.5 million mainly due to the movement of funds between categories; - Metropolitan Trading Company decreases by R7.3 million to mitigate the reduction in revenue;

13 Joburg Market decreases by R14.3 million mainly due to savings on finance and administration costs (R10 million), IT costs, marketing costs and operational costs to align expenditure with revenue performance of the City; - JOSHCO increases by R4.2 million due to the increase in operational costs brought about by the growth of the entity; and - Joburg City Theatres increase by R1.4 million mainly due to the budget transfer from Community Development for the Arts Alive Festival (R10 million) offset by the transfer of hospitality and catering employee costs transferred to employee related costs (R8.6 million). Contributions to provisions reduce by R3.5 million (Pikitup) in line with mid-year performance. The subsidies to the MEs were adjusted by R209.3 million and are as follows: Vote Approved Adjusted Adjustments 2017/ /18 R 000 R 000 R 000 Pikitup Johannesburg Roads Agency Metrobus Johannesburg City Parks and Zoo Johannesburg Development Agency Johannesburg Property Company Metropolitan Trading Company Johannesburg Social and Housing Company Joburg City Theatres Total subsidies to ME's Risk and Mitigation Potential Risk Under performance on revenue. The reduction in surpluses within the budgets of City Power and Johannesburg Water. Mitigation action Departments and entities must introduce efficiency measures within the existing budget to absorb any possible shortfalls; and City Power and Johannesburg Water should make a concerted effort to increase surpluses in order to mitigate the risk of CoJ capital funding over the medium-term;

14 POLICY IMPLICATION None 5. LEGAL AND CONSTITUTIONAL IMPLICATIONS In terms of Section 28 of the Municipal Finance Management Act 56 of 2003, a municipality may revise an approved budget through an adjustment budget for tabling at Council. 6. FINANCIAL IMPLICATIONS Approved Adj- Adjusted Consolidated Operating ments (including internal transfers) R 000 R 000 R 000 Total Revenue ( ) Total Expenditure ( ) Capital Grants and Contributions ( ) Taxation (44 075) Surplus (Deficit) for the year ( ) COMMUNICATION IMPLICATIONS In terms of Section 24 of the Municipal Finance Management Act, immediately after the approval of the adjustment budget, the accounting officer must inter alia, submit the adjustment budget to National Treasury and Provincial Treasury. The adjustment budget will be placed on the City s website after the approval. 8. OTHER DEPARTMENTS CONSULTED Legal Department, All Core administration departments and Municipal Entities. 9. KEY PERFORMANCE INDICATOR Management of the budget process in compliance with the Municipal Finance Management Act Chapter 4. IT IS RECOMMENDED 1. That the Adjustment Operating Revenue and Expenditure for Core Administration and Municipal Entities as set out in Annexure A, B, C and D be approved. 2. That the supporting information contained in the 2017/18 Adjusted Revenue and Expenditure document as required in terms of Section 17(3) of the Municipal Finance Management Act (Act 56 of 2003) be considered in conjunction with this report. 3. That the risks highlighted in the body of the report be noted and mitigated.

15 That efficiency measures to manage expenditure within the final adjusted budget allocations be continued by all Departments and Entities. () (tc) THE NEXT ITEM FOLLOWS THE ANNEXURES TO THIS ITEM