DRAFT ANNUAL REPORT 2016/2017 1

Transcription

1 DRAFT ANNUAL REPORT 2016/2017 1

2 CONTENTS CONTENTS CHAPTER 1 MAYOR S FOREWORD AND EXECUTIVE SUMMARY... COMPONENT A: MAYOR S FOREWORD... COMPONENT B: EXECUTIVE SUMMARY MUNICIPAL MANAGER S OVERVIEW MUNICIPAL FUNCTIONS, POPULATION AND ENVIRONMENTAL OVERVIEW SERVICE DELIVERY OVERVIEW FINANCIAL HEALTH OVERVIEW ORGANISATIONAL DEVELOPMENT OVERVIEW AUDITOR GENERAL REPORT STATUTORY ANNUAL REPORT PROCESS... CHAPTER 2 GOVERNANCE... COMPONENT A: POLITICAL AND ADMINISTRATIVE GOVERNANCE POLITICAL GOVERNANCE ADMINISTRATIVE GOVERNANCE... COMPONENT B: INTERGOVERNMENTAL RELATIONS INTERGOVERNMENTAL RELATIONS... COMPONENT C: PUBLIC ACCOUNTABILITY AND PARTICIPATION PUBLIC MEETINGS IDP PARTICIPATION AND ALIGNMENT A COMMUNICATION AND PUBLIC RELATIONS.. COMPONENT D: CORPORATE GOVERNANCE RISK MANAGEMENT ANTI-CORRUPTION AND FRAUD SUPPLY CHAIN MANAGEMENT BY-LAWS WEBSITES PUBLIC SATISFACTION ON MUNICIPAL SERVICES... CHAPTER 3 SERVICE DELIVERY PERFORMANCE (PERFORMANCE REPORT PART I)... COMPONENT A: BASIC SERVICES WATER PROVISION WASTE WATER (SANITATION) PROVISION ELECTRICITY WASTE MANAGEMENT (THIS SECTION TO INCLUDE: REFUSE COLLECTIONS, WASTE DISPOSAL, STREET CLEANING AND RECYCLING) HOUSING FREE BASIC SERVICES AND INDIGENT SUPPORT... 2

3 COMPONENT B: ROAD TRANSPORT ROADS TRANSPORT (INCLUDING VEHICLE LICENSING & PUBLIC BUS OPERATION) WASTE WATER (STORMWATER DRAINAGE)... COMPONENT C: PLANNING AND DEVELOPMENT PLANNING A CAPACITY BUILDING LOCAL ECONOMIC DEVELOPMENT (INCLUDING TOURISM AND MARKET PLACES COMPONENT D: COMMUNITY & SOCIAL SERVICES LIBRARIES; ARCHIVES; MUSEUMS; GALLERIES; COMMUNITY FACILITIES; OTHER (THEATRES, ZOOS, ETC) CEMETERIES AND CREMATORIUMS CHILD CARE; AGED CARE; SOCIAL PROGRAMMES... COMPONENT E: ENVIRONMENTAL PROTECTION POLLUTION CONTROL BIO-DIVERSITY; LANDSCAPE (INCL. OPEN SPACES); AND OTHER (EG. COASTAL PROTECTION) COMPONENT F: HEALTH CLINICS AMBULANCE SERVICES HEALTH INSPECTION; FOOD AND ABATTOIR LICENSING AND INSPECTION; ETC.. COMPONENT G: SECURITY AND SAFETY POLICE FIRE OTHER (DISASTER MANAGEMENT, ANIMAL LICENCING AND CONTROL, CONTROL OF PUBLIC NUISANCES AND OTHER)... COMPONENT H: SPORT AND RECREATION SPORT AND RECREATION... COMPONENT I: CORPORATE POLICY OFFICES AND OTHER SERVICES EXECUTIVE AND COUNCIL FINANCIAL SERVICES HUMAN RESOURCE SERVICES INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) SERVICES PROPERTY; LEGAL; RISK MANAGEMENT AND PROCUREMENT SERVICES... 3

4 COMPONENT J: MISCELLANEOUS... COMPONENT K: ORGANISATIONAL PERFORMANCE SCORECARD... CHAPTER 4 ORGANISATIONAL DEVELOPMENT PERFORMANCE (PERFORMANCE REPORT PART II)... COMPONENT A: INTRODUCTION TO THE MUNICIPAL PERSONNEL EMPLOYEE TOTALS, TURNOVER AND VACANCIES... COMPONENT B: MANAGING THE MUNICIPAL WORKFORCE POLICIES INJURIES, SICKNESS AND SUSPENSIONS PERFORMANCE REWARDS... COMPONENT C: CAPACITATING THE MUNICIPAL WORKFORCE SKILLS DEVELOPMENT AND TRAINING... COMPONENT D: MANAGING THE WORKFORCE EXPENDITURE 4.6 EMPLOYEE EXPENDITURE... CHAPTER 5 FINANCIAL PERFORMANCE... CHAPTER 6 AUDITOR GENERAL AUDIT FINDINGS... COMPONENT A: AUDITOR-GENERAL OPINION OF FINANCIAL STATEMENTS 2013/ AUDITOR GENERAL REPORTS Year 2013/2014 (Previous year)... COMPONENT B: AUDITOR-GENERAL OPINION YEAR 2014/ AUDITOR GENERAL REPORT YEAR RESPONSE TO THE AUDITOR GENERAL REPORT APPENDICES... APPENDIX A COUNCILLORS; COMMITTEE ALLOCATION AND COUNCIL ATTENDANCE APPENDIX B COMMITTEES AND COMMITTEE PURPOSES... APPENDIX C THIRD TIER ADMINISTRATIVE STRUCTURE... APPENDIX D FUNCTIONS OF MUNICIPALITY / ENTITY... APPENDIX E WARD REPORTING... APPENDIX F WARD INFORMATION... APPENDIX G RECOMMENDATIONS OF THE MUNICIPAL AUDIT COMMITTEE YEAR 0. 4

5 APPENDIX H LONG TERM CONTRACTS AND PUBLIC PRIVATE PARTNERSHIPS... APPENDIX I MUNICIPAL ENTITY/ SERVICE PROVIDER PERFORMANCE SCHEDULE... APPENDIX J DISCLOSURES OF FINANCIAL INTERESTS... APPENDIX K: REVENUE COLLECTION PERFORMANCE BY VOTE AND BY SOURCE... APPENDIX K (i): REVENUE COLLECTION PERFORMANCE BY VOTE... APPENDIX K (ii): REVENUE COLLECTION PERFORMANCE BY SOURCE... APPENDIX L: CONDITIONAL GRANTS RECEIVED: EXCLUDING MIG... APPENDIX M: CAPITAL EXPENDITURE NEW & UPGRADE/RENEWAL PROGRAMMES APPENDIX M (i): CAPITAL EXPENDITURE - NEW ASSETS PROGRAMME... APPENDIX M (ii): CAPITAL EXPENDITURE UPGRADE/RENEWAL PROGRAMME... APPENDIX N CAPITAL PROGRAMME BY PROJECT YEAR 0... APPENDIX O CAPITAL PROGRAMME BY PROJECT BY WARD YEAR 0... APPENDIX P SERVICE CONNECTION BACKLOGS AT SCHOOLS AND CLINICS... APPENDIX Q SERVICE BACKLOGS EXPERIENCED BY THE COMMUNITY WHERE ANOTHER SPHERE OF GOVERNMENT IS RESPONSIBLE FOR SERVICE PROVISION... APPENDIX R DECLARATION OF LOANS AND GRANTS MADE BY THE MUNICIPALITY APPENDIX S NATIONAL AND PROVINCIAL OUTCOMES FOR LOCAL GOVERNMENT.. APPENDIX T REPORTING ON KPA S AS PER REQUIREMENT OF DEPARTMENT OF LOCAL GOVERNMENT AND TRADITIONAL AFFAIRS. ABBREVIATIONS: AFS = Annual Financial Statements AG = Auditor General AGSA = Auditor General of South Africa ANC = African National Congress BAAM = Business Adopt a Municipality BAC = Bid Adjudication Committee BCDA = Blue Crane Development Agency BCRM = Blue Crane Route Municipality BEE = Black Economic Empowerment CBO = Community Based Organisation CDDA = Cacadu District Development Agency CFO = Chief Financial Officer CHDA = Chris Hani Development Agency COGTA = Co-operative Governance and Traditional Affairs CSIR = Council for Scientific and Industrial Research DA = Democratic Alliance DAC = District Aids Council DCF = District Communicators Forum DEDEAT = Department of Economic Development and Tourism DM = Disaster Management / District Municipality DoRA = Division of Revenue Act DSRAC = Department of Sport, Recreation and Culture DST = District Steering Committee LRED = Local and Regional Economic Development DTI = Department of Trade and Industry IDZ = Industrial Development Zone DWC = District Womens Caucus ECSECC = Eastern Cape Socio Economic Consultative Council ECPTA = Eastern Cape Parks and Tourism Agency EEP = Employment Equity Plan EHS = Environmental Health Service EPWP = Extended Public Works Programme EXCO = Executive Committee 5

6 FY = Financial Year GCIS = Government Communications and Information Systems GDP = Gross Domestic Product GIS = Geographical Information System GRAP = Generally Recognised Accounting Practice GVA = Gross Value Add HCT = HIV Counselling and Testing HR = Human Resources ICT = Information and Communication Technology ICT = Information Technology IDC = Industrial Development Corporation IDP = Integrated Development Plan IFAD = International Fund for Agricultural Development IGR = Intergovernmental Relations IT = Information Technology KCP = Key Catalytic Project KDA = Kouga Development Agency KKM Koukamma Municipality KPA = Key Performance Area KPI = Key Performance Indicator KZN = KwaZulu Natal LAC = Local Aids Council LED = Local Economic Development LM = Local Municipality LTO = Local Tourism Organisation LUM = Land Use Management MAYCO = Mayoral Committee MEC = Member of Executive Council MFMA = Municipal Finance Management Act MFMIP = Municipal Finance Management Internship Programme MHS = Municipal Health Service MIG = Municipal Infrastructure Grant MM = Municipal Manager MOU = Memorandum of Agreement MPAC = Municipal Public Accounts Committee MRM = Moral Regeneration Movement MSA = Municipal Systems Act mscoa = Municipal Standard Charter of Accounts MTSF = Medium Term Strategic Framework N/A = Not applicable NGO = Non-Govermental Organisation NMMU = Nelson Mandela Metropolitan University OTP = Office of the Premier PAA = Public Audit Act PCF = Premier s Co-ordinating Forum PGDP = Provincial Growth and Development Plan PMS = Performance Management System PMU = Project Management Unit PRO = Public Relations Officer PSC = Project Steering Committee REDI = Rural Economic Development Initiative RRAMS = Rural Road Asset Management System S A = South Africa SALGA = South African Local Government Association SAP = South African Police SBDM = Sarah Baartman District Municipality 6

7 SCM = Supply Chain Management SCOA Standard Charter of Accounts SDBIP = Service Delivery and Budget Implementation Plan SDF = Spatial Development Framework SEEDS = Socio-Economic and Enterprise Development Strategy SETA = Skills Education Training Authority SHRMP = Strategic Human Resource Management Plan SLA = Service Level Agreement SMIG = Municipal Systems Improvement Grant SMME = Small, Medium, Micro Enterprise SOE = State Owned Enterprise SPLUMA = Spatial Planning Land Use Management Act SRVM = Sundays River Valley Municipality TK = TASK (Tuned Assessment Skills and Knowledge) UG = Unemployed Graduates UGP = University Grants Programme WSA = Water Services Authority WSP = Workplace Skills Plan VOLUME II: ANNUAL FINANCIAL STATEMENTS See separate document 7

8 CHAPTER 1 EXECUTIVE MAYOR S FOREWORD AND EXECUTIVE SUMMARY COMPONENT A: EXECUTIVE MAYOR S FOREWORD The local government elections were held on the 03 August The Municipal Council was sworn in on the 24 August I feel humbled to be elected as Executive Mayor for this term again. I want to thank the Council and my political party for the faith they have placed in me to carry out this important responsibility. I want to express a word of appreciation to the former members of the Mayoral Committee as well as the former Council members for their direction, guidance and support in achieving the goals of the municipality. Following the local general election, the new Mayoral Committee was appointed by Council. I wish to thank the Council and members of the Mayoral Committee for their support in the 2016/17 financial year. Many of the employment contracts of senior personnel expired during the year of review. The contract of Director: Economic Development, Mr Kate expired on 30 September The contract of the Director: Infrastructure Services and Planning, Mr Makedama expired on 31 October The contract of the Municipal Manager: Mr Pillay expired on 31 December Following the resignation of the former Director: Finance and Corporate Services, Mr de Lange in the 2015/16 financial year, Mr Lorgat was appointed as Director: Finance and Corporate Services effective 01 September Mr Pillay was again appointed as Municipal Manager effective from 01 March However the other Director positions have not been filled. The Council placed a moratorium on the filling of vacancies, including that of the Directors. The Council was of the view that the municipality must determine its priorities for the next five years. In November 2016, the SBDM embarked on a Strategic Planning exercise to guide the work of the District Municipality over the next five years. The outcome of strategic exercise was to: Support local municipalities Grow the economy of the district Review the functions currently implemented by the local municipalities as agents of the district municipality, as well as the review of the status of the Water Services Authorities Build a capable institution that is financially viable. The IDP over the next five years reflects these focus areas. An organogram must then be developed to reflect the new priorities. Only then, can the Director posts can be filled. The process to fill the senior managers vacancies should be finalised in the first half of the new financial year. During the year of review, the municipality had to implement the IDP and Budget approved by the outgoing Council. The performance of the institution in the period can best be regarded as satisfactory. This can be attributed to the non-filling of vacancies at the Management level, as indicated above. This annual report will reflect the performance of the district municipality. Our financial performance is always exemplary and we have achieved unqualified audits in the past financial years and achieved another clean audit opinion for the 2016/2017 financial year. 8

9 Unemployment remains as one of the biggest challenges facing the District. The unemployment figure is still unaccepted very high. Many social problems are also very evident. Through our intergovernmental frame work, we are engaging with Provincial and National Departments to deal with these problems. However as a District Municipality, we have made an important impact in our area. We have financially supported many small, medium and micro enterprises. We have also supported the Tourism and Creative Industry Sector. We have also assisted the Local Municipalities in our district in promoting development as well as providing institutional and financial support. Unfortunately, the situation at Makana Local Municipality seems to have deteriorated during the past financial year. This is evidenced by ever increasing payroll budget and a huge debt owed to creditors. The issue of the Municipal Manager at Makana Local Municipality needs to be resolved. This matter is now tied up in litigation. In the year on the review, the erstwhile municipalities of Camdeboo, Baviaans and Ikwezi were disestablished. The newly created municipality, called Dr Beyers Naude Local Municipality came into being after the government election in I am pleased to report that the situation is stabilizing after a very difficult start. As a result of our partnership with Jing Cheng Municipality, a group of performers from the district went to Jingcheng in China in February 2017 to perform in their festival. Furthermore, the donation of IT Equipment, Furniture and Educational material that was received from China was distributed during the past year. The district is affected by a crippling drought. The Council declared a local state of disaster for the district affecting all 7 local municipalities. The situation is worsening, and unless we receive rains shortly, the consequences will be very dire for the communities of the district as well as for the agricultural sector. This is already being evidenced in the lower yield in the citrus industry. Small scale and emerging farmers are also experiencing huge losses due to the drought situation. In the past financial year, one of our Councillors, Clr G Cannon passed away. She represented Ndlambe Local Municipality in our Council. We will miss her contribution in our Council. I wish to thank the Council and the administration for their perseverance and diligence in a very difficult period in ensuring that the goals of the institutions are achieved. By applying strict oversight and monitoring in the new financial year, we hope to see the performance reach new heights. K E KEKANA EXECUTIVE MAYOR 9

10 COMPONENT B: EXECUTIVE SUMMARY 1.1 MUNICIPAL MANAGER S OVERVIEW EXECUTIVE SUMMARY This annual report is prepared in accordance with the guidelines of Circular 63 issued by National Treasury. The circular from National Treasury places much emphasis on statistical and quantitative data. Government wants to set specific targets to measure the effect of service delivery and the impact it makes on communities. The Integrated Development Plan (IDP) serves as a blueprint for the work of the municipality. The budget that was approved by Council provides the necessary financing to implement the priorities of the institution. The IDP in question is the fifth (5 th ) IDP of this term of the Council. The priorities of the municipality over the past five years were Investment in Infrastructure, Promoting Economic Development, Support and Capacity Building of local municipalities, Community Services as well as Institutional Development. The priorities and projects that were approved are encapsulated in the Service Delivery and Budget Implementation Plan (SDBIP). This SDBIP is the institutional scorecard. The Municipal Manager as Accounting Officer is responsible to ensure that the SDBIP is implemented. This Executive Summary therefore provides a broad overview of the performance of the District Municipality during the financial year under review. The Organisational Performance Scorecard in Chapter 3 of this Annual Report provides, amongst other things, the performance indicators, the target of each indicator, and whether the target has been achieved or not achieved. Where targets have not been achieved, reasons have been provided. By their very nature, many of the projects and programmes that are embarked on are multi-year projects. Hence progress on some of these projects would have been reflected in prior financial years. Other projects may have been initiated in the year under review and will be completed in the next or subsequent financial year. The Council, led by the Speaker, is the ultimate decision-making body. The Council approves the policies that govern the work of the municipality. The Mayoral Committee, comprising of the Executive Mayor and the five full-time councillors, is responsible to ensure that the policies are implemented and objectives of Council are achieved. Although there are no standing committees or portfolio committees, the District Municipality involves its councillors in serving in Intergovernmental forums. Special committees are also set up to deal with specific tasks. The Audit Committee and the Municipal Public Accounts Committee (MPAC) play key oversight roles. The Office of the Municipal Manager is also responsible to ensure that the objectives of the Intergovernmental Relations Framework Act are achieved. This is done in collaboration and in partnership with other spheres of government. The Councillors and officials of the District Municipality therefore participate in various sector department forums as well as the working groups of SALGA. The role as well as the powers and functions of district municipalities are set out in the Municipal Structures Act, 1998 (Act 117 of 1998). Section 83(3) of the Municipal Structures Act emphasises that the district municipality must support and capacitate local municipalities in its area of jurisdiction. Section 84(1) of the Municipal Structures Act determines the powers and functions of district municipalities. In the Sarah Baartman District area, many of the municipal services that relate directly to communities have been assigned to local municipalities. The provision of water, sanitation, electricity, refuse collection and disposal, maintenance of roads within the towns and residential areas, the provision of community service such as libraries, maintenance of parks, swimming pools are all functions of local municipalities. The provision of Primary Health Care is the responsibility of the Provincial Government and they perform that function in the Sarah Baartman district. The role of the Sarah Baartman District Municipality can be regarded as a development facilitator. This role takes cognisance of the reality of the huge geographical area that the district covers and the vast distances between the various towns. The Municipality depends exclusively on government funding to perform its functions. This is in the form of Equitable Share and Levy Replacement grants. A limited amount of conditional grant funding is also 10

11 received by the Municipality. By their very nature, conditional grants are earmarked for specific purposes. However there are many needs of the district and the municipality had to utilize some of its reserves to finance its operations. This is not an ideal situation. The sustainability of the municipality is therefore of paramount importance. INFRASTRUCTURE INVESTMENT Local Municipalities in the Sarah Baartman District are the Water Services Authority and Water Services Providers. The District Municipality however has a responsibility to support the local municipalities in the performance of these functions. The District Municipality does not receive any Municipal Infrastructure Grant from National Treasury, and any funding that the District Municipality makes available in supporting local municipalities comes primarily out of its own revenue sources. During the period of review it was evident that some of the local municipalities in the District are not performing the WSA and WSP functions adequately. This is evidenced by the various indicators set by the Department of Water and Sanitation. The Department has raised this matter on numerous occasions with the District Municipality. Whilst the Department provides support to the local municipalities to carry out the functions, it is of the view of the Department that where the local municipality does not have the capacity to perform this function, the district municipality must take over the function. This is a long and complicated process which will require extensive public consultation and also legislative changes. This matter will receive attention in the new financial year. In the previous Annual Report, it was indicated that the contractor was appointed for the construction of the Intercity Bus and Taxi terminal in Graaff-Reinet, The project has progressed very well and was completed in the 2016/2017 financial year. The Provincial Government made a contribution of R8million for this project. In 2017/18 the Council will continue with the next phase of the project. It was mentioned in the previous Annual Report that the District Wide Infrastructure Plan has not been finalised. The status is that the project is still not yet finalised. This is largely due to differences of interpretation of the terms of reference between the municipality and the service provider. Another contributing factor was the non-cooperation of local municipalities in supplying information to the service provider. These issues have now been ironed out and the plan is anticipated to be completed in first half of the new financial year. The Rural Road Asset Management System has been set up for the local municipalities and the district municipality. This project was financed by a grant from National Government. The system indicates the condition of the various roads in the district and the remedial measures that must be implemented. The project relating to the upgrading of the roads and stormwater in Rietbron was not achieved in the financial year. This was due to the difficulty in appointing a service provider to undertake the project. The first two attempts to appoint a service provider were unsuccessful as there was no responsive bidder. In view of that, the district municipality had to resort in procuring the material. It is envisaged that a service provider, for the supply of labour and the plant, will be appointed early in the new financial year. This project is anticipated to be concluded in February The construction of the 1,3km stretch of road in Valencia in the Sundays River Valley area is close to completion as well as the 1,2km repair of the main road in Nomathamsanqa. The Nomathamsanqa project was funded from the EPWP grant. The review of the Integrated Waste Management Plans for Makana, Koukamma, Blue Crane Route, Ndlambe, Kouga and Sundays River Valley local municipalities, were completed. The Makana zoning scheme was reviewed during the financial year. Unfortunately the Ndlambe zoning scheme was not finalized. It is also gratifying to note the completion of the Air Quality Management Plan for the district. The Spatial Planning and Land Use Management Act (SPLUMA) became effective in In terms of SPLUMA, land use management and land use management matters can be dealt with at local municipal level. Whenever there are objectiions to applications, this must be dealt with by a Tribunal. Three (3) of the local municipalities (Ndlambe, Blue Crane Route and Sundays River Valley) have requested to be part of a district tribunal. Unfortunately the tribunal has not been set up due to non-cooperation from two of the municipalities. 11

12 SUPPORT TO LOCAL MUNICIPALITIES Support to local municipalities is a key priority of the district municipality. During the cause of the year the district municipality supported the establishment of the newly created Dr Beyers Naudé local municipality through various forms. With the amalgamation of Camdeboo, Baviaans and Ikwezi Local municipality the local municipalities in the district have now been reduced from nine (9) to seven (7). The District Municipality support to local municipalities is in line of the Back to Basics program. Furthermore the district has been active in supporting the Province in the creation of War Rooms as part of Operation Masiphathisane. Further the district program is to support local municipalities to improve their financial systems and to respond to GRAP to improve audit outcomes, is yielding positive results. All seven (7) local municipalities have been assisted and this assistance is resulting in positive improvements in the Audit opinions. The District Municipality continuously support local municipalities in the area of performance management. A Performance Management System was developed many years ago and local municipalities can utilise the system at no cost, however some municipalities have not used the system effectively as required. The District Municipality will be developing a support plan in 2017/2018 financial year for all seven (7) local municipalities. The District Municipality continues to manage the Municipal Infrastructure Grant of Makana local municipality. This is due to the fact that COGTA and National Treasury have concerns about the ability of Makana to manage the funds. Makana municipality however identify the projects and make the appointments of consultants and contractors. In the previous Annual Report it was indicated that the Job Evaluation Unit was established. It was also indicated that the unit will evaluate all posts in the local municipalities and the district municipality. Many difficulties have been encountered in this financial year and progress has been very slow. These matters will be given urgent attention in the new financial year. COMMUNITY SERVICES Environmental Health is a function of the district municipality. In the year under review, the District Municipality appointed seven (7) of the local municipalities to perform the Environmental Health function as its agent. The Local Municipalities are funded for this responsibility based on the per capita of each area. The district continues to render this service in the erstwhile Ikwezi and Baviaans areas. The continuation of the agency arrangements will be reviewed in the 2017/2018 financial year. The Municipal Structures Act sets out the district responsibility for fire fighting services. These include planning, co-ordinating and regulation of fire services; co-ordination of the standardisation of infrastructure equipment, vehicles and procedures; training of fire officers as well as specialised firefighting services such as mountain, veld and chemical fires. The district municipality has appointed the local municipalities to perform these functions as its agent. Local Municipalities are funded in terms of an approved model which takes various factors into account. The emergency response centre inclusive of a fire station at Bushman River Mouth in Ndlambe is close to completion. This project cost R12 million. However the electricity upgrade still needs to be done by Eskom. The project of the restoration and standardisation of fire hydrants were completed. Fire hydrants were standardised in Blue Crane Route (187), Dr Beyers Naudé (201) and in Ndlambe (26). Disaster Management is a function of district municipalities. The construction of the Disaster Emergency Response Centre in Paterson has not been completed. The Provincial Department of Public Works is assisting the district municipality with the planning of the centre. The Draft Bid for Service providers (consultants) has been prepared. It is envisaged that the consultants and the contractors will be appointed in the new financial year. In terms of the disaster risk reduction programme, a team of fifteen (15) young people were trained as artisans in Pearston. As part of their training, they constructed a house which was handed over to a family whose house was destroyed in an earlier disaster. Disaster risk assessments have been undertaken at all seven (7) local municipalities. The project requires extensive consultation with the local municipalities and other stakeholders. The project is envisaged to be 12

13 completed in November Thereafter disaster management plans will be developed for all seven municipalities. The District Municipality has a partnership agreement with SANTAM. During the cause of the year, SANTAM has supported the district municipality and its local municipalities in terms of disaster and fire risk. These included the acquisition of fire equipment, conducting of training for Disaster Management and Fire personnel, installation of fire alarms in informal settlements in Kouga, Blue Crane Route and Ndlambe. SANTAM built and installed a decision support tool on the GIS system, to train disaster management staff and GIS users. This partnership came to an end on 30 June 2017 and negotiations are in place for the partnership to be renewed. ECONOMIC DEVELOPMENT The District Municipality has an important role to play with regards to Economic Development. Unfortunately unemployment is a major concern. Fourteen (14) small, medium and micro enterprises and co-operatives were financially supported. A Provincial Youth Economic Summit was convened during the year. This provided a platform for SMMEs from across the district to obtain vital information from the various government departments and agencies that were present. As part of the build-up programme for the Summit, a district emerging film-makers forum was launched and was also financially supported by the district municipality. The district support team convened on three (3) occasions in the financial year. The district support team is an IGR Forum that comprises of the district municipality and the local municipalities, SEDA, National, Provincial and sector departments. This structure s aim is to build the capacity in the local municipalities towards implementing Economic Development Programmes. With regards to Tourism, the district supported five (5) local tourism organisations in the district. These included, Makana, Blue Crane Route, Sundays River Valley, Ndlambe and Kouga. In addition the district supported tourism infrastructure development projects in Blue Crane Route, Makana, Kouga and Dr Beyers Naudé local municipality. Unfortunately the marketing programme was not fully implemented. This was primarily due to the change of service providers and objection from an unsuccessful bidder which resulted in the successful company only commencing mid-way through the financial year. The District Municipality contributed to the National Arts Festival. The funding was to be used for specific programs which are part of the festival itinerary. There are many other festivals that occur in the district and the district also supports these festivals. Currently the district municipality has two (2) agricultural mentorship programmes in the Baviaans area (Sevenfontein) and in the Makana area (Kuduville). This programme aims to capacitate emerging farmers. The project is to formulate a Creative Industries Strategy for the district municipality was not achieved. It is envisaged that this strategy will be completed in the new financial year. The district nevertheless supported two (2) applications from Makana. It was indicated in the previous Annual Report that an Agri-park will be established in Addo, Sundays River Valley area. This project is being funded by the Department of Rural Development and Land Reform. Progress on this initiative has been very slow. This is largely due to neighbouring communities claiming use of the land that was identified. Hopefully these matters will be resolved in the 2017/2018 financial year. The District Municipality has set up a co-operative in growing the honeybush tea. The SBDM previously contributed towards a building in Tweerivier in Kou-Kamma to revitalize the honey bush tea industry. The District Municipality has a development agency. Various initiatives have been embarked upon the agency in the 2016/2017 financial year. The report on implementation of the programmes and the financial performance of the agency is reflected elsewhere in this Annual Report. INSTITUTIONAL DEVELOPMENT Institutional development is also a major priority. The district municipality needs to employ skilled staff who is able to support local municipalities and deal with the various challenges that fact the area. Unfortunately the progress of some managers to complete the Competency Based Unit Standards training as required by National Treasury has not been acceptable. 13

14 The District Municipality embarks on training in accordance with the Workplace Skills Plan. As indicated in the Mayor s forward the Council has placed a moratorium on the employment of personnel. This also requires an organogram to be developed. The imposition of the moratorium is placing tremendous strain on the officials. The approval of an organogram will be dealt with early in the new financial year. The staff complement of the district consists of seventy employees. There are presently forty-five females and twenty-five males employed at the institution as the end of June The District Municipality exceeds all their targets on the Employment Equity Plan. The District Municipality also has a partnership with Duetsche Gesulschaft fur Internationale Zusammenarbert (GIZ) and the Eastern Cape Aids Council with regards to HIV and AIDS. An official has been seconded to assist the district municipality in this regards. Only part of the 2016/17 plan for HIV/AIDS was implemented. Extensive door to door campaigns were concluded as part of the education and awareness campaign. Voluntary counselling and testing sessions is a continuous programme at the clinics and various district events. A new HIV/AIDS Plan was developed for 2017/2018. The fight against tuberculosis is also part of the programme. The Office of the Municipal Manager is also responsible to co-ordinate programmes aimed at youth development, supporting people with disabilities as well as the empowerment of women. Other targeted programmes especially aimed at the aged. Children and sports programmes are supported by the Office of the Executive Mayor. Many of the campaigns and support initiatives are implemented with sector departments and other government agencies. The District Municipality has withdrawn from the Connect with Sarah Baartman in February The provision of internet and services at the various libraries is now being managed by Department of Sports, Recreation, Arts and Culture. FINANCIAL OVERVIEW An analysis of the Municipality s Statement of Financial Position for the year ended 30 June 2017 reveals that the Municipality is still maintaining a strong financial position through prudent financial management approaches and effective corporate governance strategies. Its cash management record over many years is excellent and the unappropriated surplus (Rm) is fully cash backed as detailed below: Cash Backed Unappropriated Surplus Balance 30 June 2017 R/m Restructuring Grant 15,0 14

15 General (includes post-employment medical benefit provision of R65,4m) Cash Backed Unappropriated Surplus Balance 30 June 2015 R/m 172,3 (includes an amount of R59,9 m which is ring-fenced for long term medical benefit liabilities and is not available for allocation) TOTAL 187,3 The Council incurred a deficit of R13, 1m in the 2016/2017 financial year for the institution. This was mainly due to the funding of infrastructure- related projects and other projects from own funding (accumulated surplus). Income for the year amounted to R115, 4 m, whilst expenditure on projects and services stood at R128, 5m. The total District Municipality final adjusted budget amounted to R167, 4m. The under spending on the operating budget is due to under spending on infrastructure-related projects and other projects funded from the operating account as well as on employee-related costs due to the moratorium placed on the filling of vacancies.. The revenue is made up of external and internal sources of income. The external source of income consists mainly of unconditional grants consisting of the Levy Replacement Grant and Equitable Share amounting to R60, 6m and R21, 4 m respectively. The Municipality generates its own internal income from mainly interest income and rentals which amount to R18, 9 and R1, 7 m respectively. The budget is spent on the operational and capital expenditure. The largest expenditure from the operating budget emanates from Payroll Costs which amounted to R44, 7m. Due to the nature of its functions, the Council does not have its own revenue streams and is almost totally dependent on grant funding. D M PILLAY MUNICIPAL MANAGER 15

16 1.2 MUNICIPAL FUNCTIONS, POPULATION AND ENVIRONMENTAL OVERVIEW INTRODUCTION TO BACKGROUND DATA The Sarah Baartman District Municipality (SBDM), is the largest ( km 2 ) of the six (6) District Municipalities in the Eastern Cape Province. The District is situated in the western portion of the Province, bordering the Western Cape, Northern Cape and two other District Municipalities in the Eastern Cape, namely Chris Hani District Municipality and Amathole District Municipality. The District consists of nine (9) local municipalities (after the amalgamation there will be seven (7))and three other portions that are National Parks, namely the Addo Elephant National Park, the Tsitsikamma National Park and Camdeboo National Park. These parks are managed by the South African National Parks Board 1. The district has the largest number of Category B municipalities in the country. The District wholly borders the Nelson Mandela Metropolitan Municipality (NMMM), and consequently, land access to the NMMM is via the SBDM. The Sarah Baartman District constitutes approximately 6,9% (census 2011 stats) of the population of the Eastern Cape Province. The District is dominated by a Karoo landmass resulting in low population densities and scattered, small inland towns. There are higher densities along the coast and in urban centres. Services in the Sarah Baartman District are primarily rendered by the local municipalities. The District Municipality invests in its Local Municipalities in terms of infrastructure; community services; economic development and capacitating Local Municipalities. Unemployment in the Sarah Baartman District is estimated at 40,484 (22%), as per census 2011 figures. Census 2001 estimated unemployment in the Sarah Baartman District at 20,5%. Recent surveys done by the Department of Labour as well as by ECSECC indicate that this figure has increased steadily. Due to its rural nature, the largest proportion of the population in the Sarah Baartman District is employed in the Agriculture sector. There has also been a significant growth in the Tourism sector with resultant employment opportunities. 1 The National Parks in the District do not form part of the 2010 demarcation exercise. All national parks are excluded from disestablishment. 16

17 POPULATION DETAILS AND SETTLEMENTS IN SARAH BAARTMAN DISTRICT Local Municipalities Main Settlements Census 2001 Census 2011 Communit y Survey 2016 Beyers Naude Graaff-Reinet, Jansenville, Willowmore Blue Crane Somerset East, Cookhouse, Pearston Route Grahamstown, Alicedale, Riebeeck Makana East Port Alfred, Kenton-on-Sea, Bushmans Ndlambe River, Alexandria Sundays River Kirkwood, Addo, Paterson Jeffreys Bay, Humansdorp, Hankey, Kouga Patensie, St Francis Kou-Kamma Joubertina, Kareedouw, Louterwater SBDM HOUSEHOLDS - Information not available at District level this information will be available from local municipalities SOCIO-ECONOMIC STATUS information not available for District Municipality in the format required. This information will be available from local municipalities. NATURAL RESOURCES - The economy of the District is primarily driven by Agriculture and Tourism 17

18 1.3. SERVICE DELIVERY OVERVIEW SERVICE DELIVERY INTRODUCTION Services in the Sarah Baartman District are primarily rendered by the local municipalities. These include water, sanitation, electricity, road maintenance and community services. The District Municipality is responsible for Environmental Health and Fire Services in terms of section 84(1)(i) and (j) of the Municipal Structures Act. Agency agreements have been entered into with local municipalities in the District to render these services. PROPORTION OF HOUSEHOLDS WITH ACCESS TO BASIC SERVICES - This information should be obtained from each individual local municipality COMMENT ON ACCESS TO BASIC SERVICES see comment above 1.4. FINANCIAL HEALTH OVERVIEW FINANCIAL OVERVIEW See Executive Summary : Municipal Manager s Overview page 3-9 OPERATING RATIOS See KPA 4 page 156 as well as information on Page of the AFS. TOTAL CAPITAL EXPENDITURE: YEAR 2015/2016 TO YEAR 2016/2017 See page.. of financial statements COMMENT ON CAPITAL EXPENDITURE The District Municipality s capital expenditure is only linked to assets used for operations and excludes infrastructural assets. All infrastructural assets through capital projects implementation, is capitalised by the local municipalities. 18

19 1.5. ORGANISATIONAL DEVELOPMENT OVERVIEW ORGANISATIONAL DEVELOPMENT PERFORMANCE During the year under review, there were no major structural changes to the organogram. In October 2016, the Council resolved to place a moratorium on the filling of all vacancies with the sole intention of developing a new organogram that will ensure that the municipality fulfil their mandate in accordance with the Municipal Systems Act in a sustainable manner. At the Strategic Planning intervention in November 2016, a number of strategies were adopted that could impact on the organisational structure. However, these changes could not be effected during the year but will be effected in the 2017/18 financial year. The most important strategy adopted is to focus on long term financial sustainability and to reduce appropriations for infrastructure and other projects. The new focus will be to provide more hands-on support to the local municipalities to improve their service delivery and financial management to ensure sustainability of the local municipalities. The Municipality has reviewed its organisational structure and is in the process of finalising the submission to Council for approval. The organisational changes will focus on the improvement of institutional performance and enhance the support to the local municipalities AUDITOR GENERAL REPORT The Sarah Baartman District Municipality received an unqualified audit report with findings in respect of the 2016/2017 financial year. The District Municipality operated in a fairly stable political taking into account the change in political leadership. The administrative environment was not as stable as the positions of the Municipal Manager, Director: Economic Development and Director: Infrastructure and Planning became vacant during the year. Acting appointments were made during this period to assist in ensuring the objectives of the respective departments and the municipality was met. The governance structures were all in place and operated effectively. There are effective internal controls and systems which result in reliable information. The full audit report is contained in Chapter 6 of this annual report Page

20 1.7. STATUTORY ANNUAL REPORT PROCESS No. Activity Time Frame 1 Consideration of next financial year s Budget and IDP process plan. Except for the legislative content, the process plan should confirm inyear reporting formats to ensure that reporting and monitoring feeds seamlessly into the Annual Report process at the end of the Budget/IDP implementation period July Implementation and monitoring of approved Budget and IDP commences (In-year financial reporting). 3 Finalise the 4th quarter Report for previous financial year 4 Submit draft 2016/2017 Draft Annual Report to Internal Audit and Auditor-General August Mayor tables the unaudited Annual Report 6 Municipality submits draft Annual Report including consolidated annual financial statements and performance report to Auditor General September Annual Performance Report as submitted to Auditor General to be provided as input to the IDP Analysis Phase 8 Auditor General audits draft Annual Report including consolidated Annual Financial Statements and Performance data September/October Municipalities receive and start to address the Auditor General s comments December 10 Mayor tables Annual Report and audited Financial Statements to Council complete with the Auditor- General s Report 2017/January Audited Draft Annual Report is made public and representation is invited 12 Oversight Committee (MPAC) assesses Annual Report 13 Council adopts Oversight report February/March Oversight report is made public 15 Oversight report is submitted to relevant provincial councils 16 Commencement of draft Budget/ IDP finalisation for next financial year. Annual Report and Oversight Reports to be used as input January

21 COMMENT ON THE ANNUAL REPORT PROCESS: For the prior years there has been alignment between the IDP and Budget. Programmes and projects of the IDP are reflected in the Service Delivery and Budget Implementation Plan (SDBIP) and feed into the Performance Management Agreements of senior officials. Performance Management is executed throughout the system and all officials have Performance Agreements. 21

22 APTER 2 GOVERNANCE CHAPTER 2 CHAPTER 2 - GOVERNANCE INTRODUCTION TO GOVERNANCE All spheres of government must provide effective, transparent, accountable and coherent government for the Republic of South Africa to secure the well-being of its people and the progressive realisation of their rights to a healthy environment, water, housing, sanitation, refuse collection, health care services, education and social security. This is in line with the objectives of the Constitution and other pieces of legislation. Evaluating the ongoing effectiveness of public officials or public bodies ensures that they are performing to their potential, providing value for money in the provision of public services, instilling confidence in the government and being responsive to the community. COMPONENT A: POLITICAL AND ADMINISTRATIVE GOVERNANCE INTRODUCTION TO POLITICAL AND ADMINISTRATIVE GOVERNANCE The SBDM recognises that good governance is a key priority in the District. The SBDM also embraces the principles of the Back to Basics programme that emphasises good governance. A number of governance structures exist in the Council. 2.1 POLITICAL GOVERNANCE INTRODUCTION TO POLITICAL GOVERNANCE The SBDM has an Executive Mayoral system which allows for the exercise of executive authority through an Executive Mayor in whom the executive leadership of the municipality is vested. The Executive Mayor is assisted by a Mayoral Committee. This committee is responsible for most of the day to day decisions of the municipality. The Council has a Speaker who chairs the meetings of Council. The Council is ultimately responsible for the approval of the IDP and Budget and other important decisions of the institution. There is an Audit Committee that provides oversight over the financial affairs and performance of the institution. A report from the Audit Committee is included in this Annual Report. There is also an Anti-Corruption and Fraud Prevention Committee. The SBDM has a Municipal Public Accounts Committee (MPAC), which comprises of non-executive councillors. The MPAC also oversights various 22

23 reports from the Council and conducts assessment and verification of projects implemented by the SBDM. One of the tasks of the MPAC is to assess the Annual Report and to provide recommendations thereon. The MPAC report will be published separately in accordance with MFMA guidelines. MUNICIPAL COUNCIL 30 Councillors EXECUTIVE MAYOR Cr K E Kekana SPEAKER Cr N. Pieters MAYORAL COMMITTEE Executive Mayor 5 Portfolio Councillors Cr K Ncamiso Cr N O Connel Cr Z Peter Cr V Stuurman Cr S Lucas Infrastructure and Planning Health and Special Tourism and Creative Finance & Economic Programmes Industries Corp Services Development 23

24 COUNCILLORS The SBDM has 30 councillors, 18 of which represent local municipalities and 12 of whom are proportional representative councillors. A full list of councillors can be found in Appendix A page 107. There are no portfolio committees. All matters are entrusted to the Mayoral Committee. However, there are many structures that exist that allow other councillors to participate, i.e. the District Wide Infrastructure Forum, District Support Team for Economic Development etc. POLITICAL DECISION-TAKING All decisions are taken by the Council, or the Executive Mayor in consultation with the Mayoral Committee, or senior officials in terms of authority delegated by legislation and/or the delegations of authority. The delegation of authority was adopted by the Council on 1 December 2004, and revised on 28 November Council has delegated a considerable amount of authority to the Executive Mayor. The Mayoral Committee also makes recommendations to Council on matters which have not been delegated to it. As the executive authority of the council, the Executive Mayor provides political guidance over the policy, budget and financial affairs of the municipality. The Speaker is in charge of the legislative arm of the municipal council. This means that she guards the integrity of the legislative process and plays an important role in the oversight that the council must exercise over the actions of the executive. She is also responsible to ensure that the municipality fulfills its public participation responsibilities. All decisions of Council are implemented. 24

25 2.2 ADMINISTRATIVE GOVERNANCE INTRODUCTION TO ADMINISTRATIVE GOVERNANCE The Municipal Manager is the accounting officer of the municipality for the purposes of the Municipal Finance Management Act and provides guidance on compliance with this Act and all other legislation applicable to local government, to political structures, political office bearers, and officials of the municipality and any entity under the sole or shared control of the municipality. The Office of the Municipal Manager is the driving force behind the Sarah Baartman District Municipality's administration and integrates all the different components of the municipality into its strategic and operational plans. The Municipal Manager is also responsible to support the Office of the Executive Mayor and the Office of the Speaker. The Municipal Manager is ultimately responsible for the institution. There are three departments in the institution, namely Finance and Corporate Services, Infrastructure Services and Planning, and Economic Development. They are more or less aligned in terms of the development priorities of the Municipality. There are also some functions entrusted to the Office of the Municipal Manager. These include: Capacity building; Special programmes (youth, gender & disabled); Intergovernmental relations; and Performance management HIV and AIDS 25

26 OFFICE OF THE MUNICIPAL MANAGER Finance & Corporate Services Department Economic Development Department Infrastructure Services and Planning Department Municipal Manager, Mr D M Pillay Mr B Makedama Mr R. Lorgat Mr P Kate Director : Infrastructure and Planning Director : Finance and Corporate Services Director : Economic Development Mr Kate s contract ended on 30 September 2016 and Mr Makedama contract ended on 31 October Due to the strategic agenda that the institution wishes to pursue, these positions were not filled. Mr Lorgat was appointed on 1 September Once the Council determines its strategic focus and the departments, it will require the positions of the Directors will be filled. This is envisaged to be done in the new financial year. The contract of the Municipal Manager expired on the 31 st December Mr Pillay was appointed for a further five (5) year period by the Council commencing on 1 March All the above officials are on fixed term performance contracts. 26

27 COMPONENT B: INTERGOVERNMENTAL RELATIONS INTRODUCTION TO CO-OPERATIVE GOVERNANCE AND INTERGOVERNMENTAL RELATIONS The SBDM recognises the importance of Intergovernmental Relations to improve service delivery to communities. Success in delivering government to the people requires an approach in which the three spheres of government work in partnership in terms of the principles of co-operative government and intergovernmental relations. 2.3 INTERGOVERNMENTAL RELATIONS NATIONAL INTERGOVERNMENTAL STRUCTURES The SBDM participates in the political as well as technical structures of the Department of Rural Development and Land Reform. PROVINCIAL INTERGOVERNMENTAL STRUCTURES The SBDM participates in the following Provincial Intergovernmental Structures: Premier s Co-ordinating Forum Political Munimec comprising Province and all local municipalities in the Eastern Cape Province Provincial Speakers Forum All of the above structures are supported by a Technical Structure which is attended by senior officials including the Municipal Manager. In addition the district municipality participates in forums that are dedicated for a specific purpose. These include: Provincial Steering Committee on EPWP Provincial Disaster Management Advisory Forum Provincial Forum on Environmental Health Provincial Forums for Planning, Legal Services, Information, Communication and Technology Provincial Communicators Forum Meetings of the above structures are convened by the Provincial Government. In addition, the Council is represented on all SALGA Working Groups. 27

28 RELATIONSHIPS WITH MUNICIPAL ENTITIES The SBDM has a Municipal entity, i.e the Cacadu District Development Agency (CDDA). The entity was established on 1 July Their primary priority is to deal with the socio-economic challenges that face the District, and to embark on projects and programmes to foster economic growth and job creation. The relationship between the SBDM and its municipal entity is governed by a Service Level Agreement, which sets out the roles and responsibilities of both parties, including Main development objectives Reporting lines Monitoring of implementation of main development objectives and related performance objectives Financial management Compliance with legislation DISTRICT INTERGOVERNMENTAL STRUCTURES In order to comply with legislative requirements and fulfill its obligations in terms of co-operative governance and intergovernmental relations, the Sarah Baartman District Municipality has established a number of internal structures and systems, including: an intergovernmental forum which complies in all respects with the requirements of the Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005) o the Sarah Baartman District Mayors Forum a number of technical support structures in terms of the aforementioned Act, for example o Municipal Managers Forum o Chief Financial Officers Forum o District Communicators Forum o District Wide Infrastructure Forum o District Support Team for Local Economic Development various other District-wide intergovernmental forums for specific purposes, e.g. o IDP Forum o LED Forum o Sarah Baartman District Health Authority (CDHA) o District HIV/AIDS Council o Speakers Forum o EPWP Regional Steering Committee The SBDM has adopted an Intergovernmental Relations policy which sets out the terms of reference of each of its IGR Forums. 28

29 COMPONENT C: PUBLIC ACCOUNTABILITY AND PARTICIPATION OVERVIEW OF PUBLIC ACCOUNTABILITY AND PARTICIPATION The function of public participation resides mainly in the Office of the Speaker. However, these exercises are sometimes carried out by departments or cross-departmental task teams, depending on the nature of the information to be disseminated. Several engagements with communities have also occurred. Issues covered during these engagements include service delivery challenges at local municipalities, for example educational challenges at schools, public hearings on legislative changes. The SBDM also arranged screenings for communities of the State of the Nation and State of the Province addresses. In addition to public meetings, the SBDM has a Public Relations and Communication Division which supplies its communities with information concerning all matters relating to the District Municipality. Information relating to this function has been added to this Component as 2.5A. 2.4 PUBLIC MEETINGS COMMUNICATION, PARTICIPATION AND FORUMS District Public Participation The SBDM s primary constituents are its local municipalities. Engagements with local municipalities occur through the intergovernmental structures as indicated previously. The SBDM also engages with stakeholders other than local municipalities. These include organized Agriculture, Non-Governmental Organisations. organized Business and organisations that serve specific interest groups. The SBDM s interaction with communities is normally done in consultation with the local municipalities. Mayoral Committee IDP and Budget Outreach to Local Municipalities The Mayoral Committee and officials of the District Municipality once again conducted an outreach to seven of the nine local municipalities in the District during April/May The purpose of the outreach was to present the draft IDP and Budget of the District Municipality to the Councillors and stakeholders of each local municipality. Sessions were held with local municipality councillors and stakeholders representing various community groups, who were given an opportunity to raise issues. Issues that are highlighted are responded to and dealt with by referring them to the relevant sphere of government. 29

30 Moral Regeneration Movement (MRM) The District Municipality established its District MRM Forum and it is functional as it meets regularly and implements its programmes according to the plan of action that was developed. The District Forum also championed the establishment of local MRM structures. Both the District structure and the local structures agreed on the various programmes that will be implemented in the local municipalities, and all conducted programmes are aimed at reviving moral fibre amongst communities in the region. The District hosted MRM programmes in the following LMs: Dr Beyers Naudé Blue Crane Route Kouga Koukamma Makana Ndlambe Sundays River Valley The district municipality launched the local MRM structures in all the municipalities with the exception of Makana Local Municipality. Other engagements during the year included: Screening of State of the Nation address Screening of State of the Province address Screening of the National Budget Speech Screening of the Provincial Budget Speech Outreaches by MEC s to the district. WARD COMMITTEES Not applicable to the District Municipality. 30

31 2.5 IDP PARTICIPATION AND ALIGNMENT IDP Participation and Alignment Criteria Does the municipality have impact, outcome, input, output indicators? Does the IDP have priorities, objectives, KPIs, development strategies? Does the IDP have multi-year targets? Are the above aligned and can they calculate into a score? Does the budget align directly to the KPIs in the strategic plan? Do the IDP KPIs align to the Section 57 Managers Do the IDP KPIs lead to functional area KPIs as per the SDBIP? Do the IDP KPIs align with the provincial KPIs on the 12 Outcomes Were the indicators communicated to the public? Were the four quarter aligned reports submitted within stipulated time frames? Yes/No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes * Section 26 Municipal Systems Act

32 2.5A COMMUNICATION AND PUBLIC RELATIONS COMMUNICATION The Sarah Baartman District Municipality has developed communication as a strategic function and has established effective communication systems and structures. The municipality employs a dedicated Public Relations Officer in order to develop and implement intentional and planned communication programmes. The communication strategy of the Sarah Baartman District Municipality is reviewed every five years. A draft was compiled in the 2016/17 financial year, with the intention being for it to be adopted before the end of It was compiled in consultation with Government Communications and Information Systems (GCIS). The strategy is aligned to the Integrated Development Plan (IDP) in that the development priorities of the Sarah Baartman District Municipality inform the messaging, themes and channels of communication. The communication strategy was developed within the context of the Medium Term Strategic Framework (MTSF), which sets out the actions Government will take, the targets that need to be achieved and provides a framework for the other plans of national, provincial and local government. Communication objectives The communication objectives of the Sarah Baartman District Municipality seek to support and express the priorities contained in the MTSF, which feeds into the overall vision of the Sarah Baartman District Municipality to be an innovative and dynamic municipality striving to improve the quality of life for all our communities in the District. The communication objectives therefore include the following: 1. To increase understanding of the work, role and mandate of the Sarah Baartman District Municipality amongst both internal and external stakeholders across the district. 2. To encourage public participation in government processes and policies. 3. To generate and maintain good relationships with the media. 4. To manage potential risks faced by the Sarah Baartman District Municipality. 5. To manage the reputation of the Sarah Baartman District Municipality. 6. To influence negative perceptions of stakeholders by continually communicating service delivery achievements and successes. 32

33 7. To facilitate and encourage two-way communication between the Sarah Baartman District Municipality and its stakeholders, both internal and external.to increase understanding of the work, role and mandate of the Sarah Baartman District Municipality amongst both internal and external stakeholders across the District. In the financial year, the communication strategy continued to serve as a guideline for all related matters. The communication action plan is renewed on an annual basis and maintained as and when it is necessary. The latter serves as a guide in respect of municipal programmes and events that require communication support or intervention. A total of 2 official District Communicators Forum meetings were convened, with participation by both government departments and Local Municipalities. The various components of the communication function have been decentralized within the institution, with the different responsibilities being assigned as follows: Responsibility Media Relations Media statements on behalf of the Municipality, Opinion Pieces & Articles Media Relations and Liaison (Council meeting, Agendas, Media Briefings) Public Relations Officer (MM is official spokesperson) Communications Research Content Development and Management Media Monitoring and Communication Environmental Analysis Speech Writing Website Content Management Branding and Corporate ID Distribution of key messages for Campaigns and Projects Corporate Communications & Marketing Internal and External Communications (Community newspaper and internal newsletter) Marketing (institution and its services) Events Management Convening the District Communicators Forum and Support to Local Municipalities Outreach and Community Liaison Inter-Governmental Relations Outreach Programmes Community Liaison Public Relations Officer Public Relations Officer MM s Office Public Relations Officer Public Relations Officer Public Relations Officer Public Relations Officer Public Relations Officer Public Relations Officer, Speaker s Officer, MM s Office Public Relations Officer Senior Admin Officer, Office of the Executive Mayor Speaker s Office Speaker s Office 33

34 Imbizo Stakeholder s Liaison and Mobilization Local Government Communication Speaker s Office Speaker s Office Speaker s Office PUBLIC RELATIONS This function includes all activities related to communication, marketing, publicity and media co-ordination for the Municipality and the District (geographical area). It is administered by the Department of Finance and Corporate Services Department and includes: Promoting the Municipality by providing sufficient information to the public and staff about Municipal issues. Coordinating municipal events such as project launches and handovers. Promoting and managing the Municipality s corporate identity and public image. Formulating and maintaining the Municipality s Communication Strategy, while also assisting the Local Municipalities in this regard. Stakeholder management and media liaison. Production of the quarterly community newspaper. Internal communication. Photography and branding. Strategic objectives: Build good relationships between the Municipality and identified target publics (internal as well as external) and stakeholders. To further public understanding about the Municipality s services, policies, procedures, goals and activities. To uphold the image and reputation of the Municipality. Key issues for 2016/2017 financial year: The publication of four issues of Sarah Baartman News, the official external newspaper of the Sarah Baartman District Municipality. Rendering of communication support to the Dr Beyers Naudé Local Municipality, following the amalgamation of the Ikwezi, Camdeboo and Baviaans local municipalities in August Continuous monitoring of the media and media liaison relevant journalists and community newspapers and radio stations. 34

35 Supporting local municipalities as and when required with communication related matters, assessing their communication needs and assisting wherever the need arises. Updating and maintenance of the municipal website of the Sarah Baartman Municipality and ongoing communication with stakeholders on social media platforms. Providing communication, branding and media support to district events. Development and implementation of media campaigns for municipal programmes. Annual coordination of the design and production of branded calendars and diaries. Number of personnel associated with the Public Relations function: 1 Public Relations Officer 1 Public Relations Intern (Unemployed Graduates Programme candidate) 35

36 COMPONENT D: CORPORATE GOVERNANCE OVERVIEW OF CORPORATE GOVERNANCE Corporate governance is the system of rules, practices and processes by which an institution is directed and controlled. Corporate governance essentially involves balancing the interests of all stakeholders. Since corporate governance also provides the framework for attaining an institution s objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure. During the year under review the municipality continued to incorporate the combined assurance approach with regard to risk management and improving internal controls. The audit committee ensures that a combined assurance model is applied to provide a coordinated approach to all assurance activities. Internal audit forms an integral part of the combined assurance model as internal assurance provider. The diagram below illustrates combined assurance approach to oversight: 36

37 2.6 RISK MANAGEMENT Risk management is a systematic process to identify, analyse, assess, control and avoid, minimise or eliminate unacceptable risks. Section 62(1)( c) of the MFMA places the responsibility on the Accounting Officer to take all reasonable steps to ensure that the municipality has and maintains effective, efficient and transparent systems of risk management. National Treasury has also provided guidance to municipalities on risk management and its implementation. It is important to note that Risk Management is the responsibility of the Accounting Officer and Senior Management. Each year a risk management workshop is held to identify the strategic risks of the municipality. The Mayoral Committee, Management and Internal Auditors identify key risks which are then rated in terms of their probability and impact on the municipality. This process enables the Municipality to rank the risks in terms of priority and to develop appropriate strategies to mitigate risks. The Internal Auditors use the information in the risk register to draft the Internal Audit Plan. The following are the top five risks to the District as identified, together with mitigating strategies: Risk Name Poor water quality and sustainability of the service Poor management of solid waste landfill sites by the local municipalities Mitigating action plans Investigate the possibility of the District Municipality taking over the Water function Assessment to be conducted on the current status in the District and thereafter actions to be developed to address the risk Inadequate Fire-fighting Services Lobby for change in legislation to clarify roles of Lack of Information Communication Technology (ICT) integration municipalities due to inconsistencies within legislation Review the Service Level Agreements entered into with the local municipalities to ensure that the roles and responsibilities of both parties are clearly defined Review and adopt ICT strategy and related policies Establish ICT governance structures Financial Sustainability Lobby task Team to access more funding to fund projects (including funding for Relocation of offices) Continuous follow up of outstanding debtors 37

38 2.7 ANTI-CORRUPTION AND FRAUD PREVENTION FRAUD AND ANTI-CORRUPTION STRATEGY The SBDM has an Anti-Corruption and Fraud Prevention Strategy. The municipality also has an Anti- Corruption and Fraud Prevention Committee in place which is chaired by the Chairperson of the Audit and Risk Committee. The Committee was not fully functional during the year under review. The matter of fraud was however discussed at each Audit and Risk Committee and it was agreed that the Internal Auditors investigate the possibility of addressing the Anti-Corruption and Fraud Prevention matters in the Audit and Risk Committee. Awareness assessments are conducted and the Council is in the process of commissioning a Hotline where anybody can report instances of corruption, fraud and theft. The Council has a Whistle Blowers Policy in place. Recommendations of the Audit Committee are included in the Council agenda and are freely available to members of the public. The recommendations of the SBDM s Audit Committee taken during the financial year under review are set out in Annexure G. 2.8 SUPPLY CHAIN MANAGEMENT OVERVIEW SUPPLY CHAIN MANAGEMENT In terms of paragraph 6 of the Supply Chain Management (SCM) Policy, the Council must maintain oversight over the implementation of this policy. The accounting officer must within 30 days of the end of each financial year, submit a report on the implementation of this policy to the council. The annual supply chain management report is submitted accordingly as well a quarterly reports to ensure a high level of oversight is maintained. The SCM unit is constantly striving to improve internal controls to ensure compliance at the highest level. The intern (from unemployed graduate programme) appointed in the prior year as well as other interns, under the Municipal Finance Management Internship Programme (MFMIP), continued with their training in the SCM Unit. All the interns contracts ended during the year. The Supply Chain Management Accountant and officer was in place for the full duration of the financial year. 38

39 Compliance and Reporting The SCM Unit has taken part in various Economic Development programmes within the District, whereby the unit provided the community or stakeholders with key information relating to how Small, Medium and Micro-sized Enterprises (SMMEs) can benefit from local government procurement processes as well as the requirements that SMMEs need to comply with to benefit in these processes. The SCM unit also assisted prospective suppliers and service providers with registering on the SCM database, taking the newly introduced Central Supplier Database (CSD) into consideration. During the year, the municipality assisted various local municipalities in resolving technical supply chain management matters through the establishment of a District Supply Chain Management Forum, chaired by the District Municipality and Provincial Treasury. The objective of this Forum is to address any technical matters as well as assist in driving all the local municipalities to a higher level of compliance. The Committee functioned well during the year and has added tremendous value to the District. Registration of Suppliers on the Database In prior years, existing service providers were issued with database re-registration forms requiring them to re-register. Advertisements were then placed in various local newspapers informing service providers and inviting new service providers to register on the municipality s supplier database. In the current year, National Treasury has introduced the Central Supplier Database (CSD) which was required to be affected on 1 July The CSD is an online database application method which enables a service provider to do business with any municipality, municipal entity as well as National and Provincial Government, through a single online application. The system includes built-in controls which allows for the verification of pertinent information in a service provider s online application. The municipality has assessed the CSD against the current internal control environment and identified a few weaknesses within the system. These weaknesses have been addressed in the CSD, with exception of the verification of directors / members being in the service of the state. The municipality therefore requires service providers to register on the CSD and complete a Declaration of Interest form to be able to provide the municipality with any goods or services. 39

40 Amendments to Legislation The Supply Chain Management policy required amendments due to the changes in regulations as well as required changes through Circulars issued by National Treasury. The policy was amended taking the following sources into account o Preferential Procurement Regulations, 2017 o o o o B-BBEE Code of Good Conduct MFMA Circular 77 - Model SCM Policy for Infrastructure Procurement and Delivery Management MFMA Circular 81 - Web Based Central Supplier Database (CSD) MFMA Circular 83 Etender Portal Monthly and Quarterly Reports Monthly Deviation Reports were submitted in terms of the SCM Policy for the procurement of goods and services. All the required quarterly reports and annual reports were submitted in terms of paragraph 6 of the Supply Chain Management policy Improvements and Compliance to Internal Controls: The committees mentioned below have been established and are functioning in accordance with SCM Policy: Bid/Formal Quotation Specification Committee Bid/Formal Quotation Evaluation Committee Bid/Formal Quotation Adjudication Committee The aforesaid committees have the responsibility to make it a point that all the procurement processes are followed, and also to ensure that the value for money is received. Internal Controls within SCM are strengthened continuously to ensure compliance to the SCM Policy. There were no major changes to the internal controls during the year. 40

41 Challenges and Constraints Poor planning by staff did not always allow for sufficient time for the SCM Unit to follow proper procurement processes. Non-adherence to the stipulated 5 working days in which to process an order also indicated poor planning. Premature authorisation of some deviations by department heads resulted in deviations being returned for correction or being declined by the Accounting Officer, as the reason provided for deviating did not meet the requirements in term of the policy. Unauthorised, Irregular, Fruitless and Wasteful Expenditure Section 32(4) of the MFMA requires disclosure of any unauthorised, irregular, fruitless and wasteful expenditure incurred by the Municipality. An exercise was undertaken during the year to identify any such expenditure incurred for the period July 2016 to April A further exercise was undertaken to identify any such expenditure incurred during May 2017 June All instances were disclosed in the financial statements accordingly. All instances identified were investigated by an Investigation Committee established by Council. The Investigation Report was submitted to Council in August 2017 and Council has resolved thereon. Solutions and Way Forward Solutions and controls for the challenges and constraints above are: A memorandum was forwarded to all users, informing them that SCM Unit has 5 working days to obtain the required quotations and a further day to process an order. Therefore, all requesters must endeavour to adhere to this. Properly motivated and completed deviations should be signed by department heads subsequent to deviations being scrutinised and signed by SCM. The following is a summary of the deviations to the supply chain policy approved during the year: Deviation Qty Value (R) Emergency Single Provider Impractical or impossible to follow the official procurement processes Total

42 2.9 BY-LAWS No by-laws were developed during the year under review 2.10 WEBSITES Municipal Website and Currency of Material Documents published on the Municipality's Website (2016/2017) Yes / No Publishing Date Annual budget Adjustment budget Yes 9 June February 2016 All current budget-related policies Yes 12 August 2015 The previous annual report (year 2015/2016) Yes 11 April 2017 The annual report (year 2016/2017) to be published Yes 28 March 2018 All current performance agreements required in terms of section Yes 57(1)(b) of the Municipal Systems Act (Year 2016/2017) and resulting scorecards: Directors: Municipal Manager 31 October May 2017 All service delivery agreements (Year 2016/2017) Yes 1 July 2016 All supply chain management contracts above a prescribed value for Year 2016/2017 All quarterly reports tabled in the council in terms of section 52 (d) during Year 2016/2017 An information statement containing a list of assets over a prescribed value that have been disposed of in terms of section 14 (2) or (4) during Year 2016/2017 Contracts agreed in Year 2016/2017 to which subsection (1) of section 33 applies, subject to subsection (3) of that section Public-private partnership agreements referred to in section 120 made in Year All long-term borrowing contracts (Year 2016/2017) Yes Yes N/A N/A N/A N/A Ongoing Quarterly 42

43 COMMENT MUNICIPAL WEBSITE CONTENT AND ACCESS: Section 75(1)(a) (l) of the MFMA is fully complied with, in that all content required to be placed on the municipal website is done so except for those that are not applicable to the Municipality. Numbers of hits on the website are measured. The approximate number of hits for the 2016/2017 financial year was The SBDM has placed computers with free internet access for use by communities in 32 libraries throughout the District, as part of its Connect with Cacadu project. The District Municipality is currently liaising with the Department of Sport, Recreation, Arts and Culture with a view to running the project through the WiFi internet capability, which the Department is installing in all libraries. If this is successful, it will bring about cost savings as the current ADSL connections at each library can then be phased out PUBLIC SATISFACTION ON MUNICIPAL SERVICES PUBLIC SATISFACTION LEVELS The District Municipality does not conduct public satisfaction surveys, but has in the past conducted good governance surveys in several of its local municipalities. The intention is to launch another one of these surveys soon in order gauge the level of public mood, in relation to good governance. The results of the survey will be communicated to the local municipalities, while feedback will be provided to communities as well. The local municipalities are required to develop remedial measures to deal with any complaints raised as a result of these interventions. 43

44 CHAPTER 3 CHAPTER 3 SERVICE DELIVERY PERFORMANCE (PERFORMANCE REPORT PART 1) INTRODUCTION As stated earlier in this report (See 1.3 Service Delivery Overview), services in the Sarah Baartman District are primarily rendered by the local municipalities. These include water, sanitation, electricity, road maintenance and community services. See Performance Scorecard in Component K of this chapter which indicates the various projects undertaken by the SBDM, some of which pertain to these services. The projects are implemented in the local municipality areas. COMPONENT A: BASIC SERVICES NOT APPLICABLE (WATER, SANITATION, ELECTRICITY, WASTE MANAGEMENT, HOUSING AND FREE BASIC SERVICES) COMPONENT B: ROAD TRANSPORT This component includes: roads; transport; and waste water (stormwater drainage). INTRODUCTION TO ROAD TRANSPORT Roads, transport and stormwater drainage are not functions of the District Municipality. The SBDM however does carry out the function of Transport Planning for the District. 3.7 ROADS Not applicable 44

45 3.8 TRANSPORT (INCLUDING VEHICLE LICENSING & PUBLIC BUS OPERATION) INTRODUCTION TO TRANSPORT In the SBDM, this function is limited to transport planning only. It Includes all activities related to transport planning for the entire District in accordance with the National Land Transport Act, No. 5 of 2009 (NLTA). Statistical information not applicable as function is limited to planning only. The road transport function of the municipality is administered by the Department: Infrastructure Services & Planning and includes: Review of the Integrated Transport Plan through the provision of a five-year prioritized implementation programme for the improvement of the transportation system within the District. Identifying infrastructure and public transport needs in the District Lobby for funding for transport infrastructure Promote road safety in the District Construction of public transport facilities including sidewalks Formulate guidelines for transport planning purposes The Strategic Objectives of this function are to: To promote mobility Promote non-motorized vehicle usage. Promote public transport usage. Improve existing public transport facilities. Improve SBDM road conditions. To promote an integration between spatial planning and transportation planning to achieve sustainable human settlements To provide technical support to the Local Municipalities Key issues for 2016/2017 Mobilizing funding to the Department of Transport for inclusion of the District in the Rural Roads Asset Management System. Establishment of the RRAMS through outsourced services of Professional Engineers to development the rural roads data base, facilitate appointment of Technicians and equipment pertaining to the RRAMS programme. 45

46 Refining of the recently developed Road Prioritization Model for the prioritization of roads in the District and packaging of priorities for purposes of lobbying for funding in collaboration with the Department of Roads, Transport and Public Works. Completion of Pedestrian walkways in Kareedouw Public Transport intercity bus terminus- Facilitate public Participation and stakeholder buy-in. Review of the District s Integrated Transport Plan. Rural Road Asset Management Systems (RRAMS) The National Department of Transport, as part of the S Hambe Sonke Programme, has provided grant funding for the implementation of Rural Road Asset Management Systems (RRAMS) as set out in the framework for the Rural Road Asset Management Systems (RRAM), Division of Revenue Act (DoRA). The strategic goal of the RRAMS Grant is to ensure efficient and effective investment in rural roads through the development of Road Asset Management Systems (RAMS) and the collection of associated road and bridge inventory data condition assessments and traffic information. Improved data on rural roads will guide infrastructure investment, improve accessibility to and mobility of rural communities. The District Municipalities (DM s) within the Eastern Cape that have received the grant funding, are following a collaborative approach with the Provincial Department of Roads and Public Works (Eastern Cape), to ensure a uniform and integrated end-product within the Eastern Cape. This will ensure consistency of data, an integrated and complete provincial database and allow a substantial saving in both time and cost. Over the past year, this collaboration has proved to be a highly successful and productive approach. The Sarah Baartman District Municipality is one of the municipalities that are receiving the grant and has been allocated the following budgets over the remaining three year life-cycle of the RRAM Grant: 2013/14 - R /15 - R /16 - R /17 - R /18 - R Number of all personnel associated with the road transport function: 1 x Infrastructure Planner (Vacant) 46

47 3.9 WASTE WATER Not applicable COMPONENT C: PLANNING AND DEVELOPMENT The District Municipality is responsible for Regional Planning and Economic Development PLANNING This includes all activities relating to the formulation, monitoring of implementation, evaluation and review of strategic plans for the entire district. It also includes assistance to local municipalities with processing of applications for land use planning and development. Description of the Activity The function of Integrated Development Planning and Spatial Planning is administered by the Department: Infrastructure Services and Planning. The main Planning activities include the formulation of the institution s strategic plans; IDP and SDF, monitor and support those implementing the plans, and review the plans annually, in terms of Chapter 5 of the Municipal Systems Act 32 of 2000 (including notice R796 regulations) and in terms of the Municipal Finance Management Act 56 of Strategic objectives: Integrated development planning and Spatial planning for the District as a whole, including the development of a framework for all category B municipalities. This includes the development and / or review of the following: o The Spatial Development Framework. (SDF) o Updated socio-economic profiles. o Review of strategies o Facilitating the identification of projects To become an established and effective integrated development planning authority in the Sarah Baartman District through: o Facilitating the District s service delivery through infrastructure and services that are planned, delivered and managed in such a way that supports the District s vision and priorities. 47

48 o Facilitating the prioritization of infrastructure projects and programmes that support the District s vision and priorities. Co-ordination and support to the planning function of local municipalities, this includes Land Use Management, Spatial Planning Guide the implementation of Spatial Planning and Land Use Management Act. Key issues for 2016/2017 The prompt preparation of the District Municipality s Integrated Development Plan for 2014/2015, which included the following key activities: o Development of a district-wide IDP Framework Plan that was adopted by the District Municipality and used to develop Process Plans for all category B municipalities their IDP preparations. o Compilation of an IDP & Budget Schedule in conjunction with the Finance Unit, in line with the MFMA. o Facilitation of various meetings and workshops with the following stakeholders: nine category B municipalities; provincial sector departments; private business sector; public entities; NGOs & CBOs o Formulation and adoption of the District s Development Priorities. o Analysis of Development Priorities identified o Crafting of Objectives and Strategies that will assist in driving the District s Development Priorities. o Identification and prioritization of Projects that will assist in achieving the District s objectives. o Collection and capturing of Sector Plans and Operational Strategies into the IDP o Development of new plans in areas where plans were not in place o Aligning and integrating programmes and plans to the PGDP of the Eastern Cape government o Strengthening and improving public participation o Preparation of IDP document and submission thereof to Council for approval o Submission of an approved IDP document to the MEC: Local Government and Traditional Affairs o Development of capacity within SBDM departments through using SBDM resources as opposed to engaging external service providers o Fulfilling horizontal alignment between municipalities and vertical alignment with the other spheres of government 48

49 The IDP was compiled without assistance from external service providers. Doing work in-house assists in ensuring staff participation and increases the strategic planning capacity within the SBDM. Support the review of Land Use Management Schemes of Local Municipalities. This is primarily driven by the new LUM act, SPLUMA, that has given more Planning functions to the municipalities and districts in regard to Land Use Management. Analysis of Function: Planning support to the nine category B municipalities is delivered using the following vehicles : The District Framework Plan that serves as a guide on critical steps in planning and timeframes. Town Planning support through development application processing, financing of review of LUM zoning schemes and capacity support. IDP Representative Forums Attendance of Local Municipality s IDP / Budget engagements All nine Municipalities are supported financially by SBDM in the development of their IDP s Hands on support is given to the Local Municipalities in the compilation of the Community based Plans Number personnel associated with the Planning function: 1x Head: Planning 2x Development Planners 2 x Planning Interns 3.10A - CAPACITY BUILDING INTRODUCTION TO CAPACITY BUILDING According to Section 83(3) of the Municipal Structures Act (MSA) No.117 of 1998, district municipalities have an obligation to assist local municipalities within their demarcated areas by building their capacity to perform their functions and exercise their powers where such capacity is lacking. Capacity Building and Support to the nine Local Municipalities in the District is of primary importance to Sarah Baartman District Municipality and is one of its main focus areas. 49

50 The main aim of the Capacity Building Strategy is to build in house capacity in local municipalities in the District and to support them so that they can perform their functions and strengthen their institutional and corporate governance systems. The function of capacity building is coordinated by a Capacity Building Unit in the Office of the Municipal Manager. Capacity building initiatives are however performed and/or managed in all Departments of the SBDM. The activity is performed by implementing initiatives aimed at empowering local municipalities to enable them to discharge their constitutional mandate and meet specific legislative prescripts. These initiatives include: co-ordinating district wide capacity building and training projects conducting specific capacity building and training projects per local municipality based on identified needs ensuring the efficient utilization of resources compiling, maintaining and managing a district information management system in collaboration with all departments. sourcing funds for the implementation of programmes and projects within the district. establishing knowledge sharing networks within and beyond the district aimed at strengthening capacity building initiatives in the district. Strategic objectives: Local municipalities that are: able to perform their legislated powers and functions and efficiently deliver cost effective services to their communities Self-sufficient, developmental in nature and financially sustainable. Closely networked and have functioning knowledge sharing structures both within the district and beyond. Key issues for 2016/2017 Initiatives in the following categories were implemented or were in progress for capacity building and support to local municipalities during the year under review: 1. Institutional 50

51 Under Institutional Capacity the focus areas were organizational development, Human Resources Management and corporate governance. Activities included the following: Supported LMs to implement and cascade PMS to all levels Provided technical support and training to all LMs on PMS Provided training on the PMS Automated system Support LM with guidance in conducting a credible recruitment processes Support LMs in vetting of shortlisted candidates Support LMs with competency assessment of preferred candidates Provide Skills Development Plan advisory services to Local Municipalities through SDF forum.supported LM (Dr Beyers Naude) with draft HR Policies Supported LM (Dr Beyers Naude) with draft policy on roles and responsibilities and delegation register 2. Financial Under financial support the activities included the following: Provided financial support to all LMs to enable them to render agency functions (Fire and Environmental Health) more effectively Supported all LMs in improving their audit outcomes Supported LMs, specifically Dr Beyers Naude with developing business plans to source funding Provided supply chain management support training Championed the Finance Workstream for the Amalgamating Municipalities 3. Special Programmes Supported local municipalities to host commemoration days Supported LMs to conduct various community dialogues to empower the designated groups 4. Infrastructure Support Assisted Koukamma, Sundays River and Dr Beyers Naude with MIG Rollover Apllication Play a coordination role between MISA and the identified LMs for support programmes 51

52 Number of personnel associated with the Capacity Building function: 1 Capacity Building Manager 1 Administrative Officer (Vacant) 3.11 LOCAL ECONOMIC DEVELOPMENT (INCLUDING TOURISM AND MARKET PLACES) INTRODUCTION TO ECONOMIC DEVELOPMENT The Economic Development function in the District Municipality includes support to Small, Medium and Micro Enterprises (SMME s), conducting agricultural mentorship programmes as well as tourism development and promotion. The Sarah Baartman District has the third biggest economy of the Province, contributing nearly 10% to the provincial Gross Value Add (GVA). The biggest sectors both in terms of Gross Domestic Product (GDP) and employment within the district is trade (including retail and tourism) with 15% and 22% respectively, followed by agriculture with 10% and 22% respectively and community services (including government) with 32% and 21% respectively. Finance contributes 21% and 4% respectively. Manufacturing (GDP: 9%; employment: 7%), transport (GDP: 7%; employment: 4%) and construction (GDP: 4%; employment: 10%) are the smallest sectors of the district economy. BRIEF PRESENTATION OF THE DISTRICT ECONOMIC DEVELOPMENT STRATEGY Agriculture is one of the most important economic drivers in the district and contributes significantly to the provincial economy; statistics indicate that Sarah Baartman is the largest producer of agricultural goods in the Eastern Cape and that around 4,000 people are employed in agro-processing industries. In order to stimulate economic growth and to create new jobs, Sarah Baartman District Municipality focuses on: Increasing agricultural income Growing national and international markets for agricultural output. Facilitating investments in local and regional agro-processing plants to increase product demand and improve prices. 52

53 Investing in research and knowledge sharing to improve the quality and resilience of crops and livestock. Supporting local and regional food systems that keep wealth in rural communities. Investing in natural capital Creating green jobs and local income streams rooted in renewable energy. Growing the rural tourism economy based on natural capital through agriculture, adventure and eco-tourism initiatives. Broadening economic participation Promoting BEEs, SMMEs and co-ops. Establishing community-based projects. Promoting social investments. Developing the skills base Improving the quality and quantity of school education and early childhood development. Creating further education opportunities linked to employment in the region. Developing skills transfer partnerships between established and emerging farmers and businesses. Regenerating "core" towns Urban regeneration projects focused on upgrading of Central Business Districts and historic districts. Promote tourism and niche services and manufacturing based on identifying competitive advantages. Ensuring that essential administrative and regulatory functions are undertaken by the municipalities and that municipal infrastructure is maintained and upgraded in order to support growth and development. Improving connectivity and utility infrastructure Identifying and delivering catalytic infrastructure that opens up new economic opportunities. Improving rural transport infrastructure, particularly roads. The access to and acquisition of land must be facilitated by the District Municipality Developing rural broadband and mobile phone connectivity is a key rural development strategy globally. 53

54 Building local and regional networks Strengthening inter-governmental relations with local municipalities as well provincial and national government involved in LED (Local Economic Development). Building partnerships to improve economic competiveness and resilience. Creating a positive image of the region amongst public and private investors and building relationships with them. PROGRESS TOWARDS ACHIEVING THE LED KEY OBJECTIVES Introduction of the District Agri-Park The Sarah Baartman District Municipality resolved in May 2015 to support the development of a District Agri-Park and actively participate in its rollout plan moving forward. The final report of the District Agri- Park Master Plan was presented to Council to note progress to date and to report the various milestones and the achievements for this project. The Agri-Parks Model is a critical strategy in the Rural Economic Transformation Agenda and hence is conceptualized as a multi-sector sphere of government responsibility. 54

55 DEFINITION OF THE AGRI-PARK, INSTITUTIONAL ARRANGEMENTS AND PROGRESS The Department of Rural Development and Land Reform has defined an Agri-Park as a networked innovation system of agro-production, processing, logistics, marketing, training and extension services, located in District Municipalities. As a network it enables a market-driven combination and integration of various agricultural activities and rural transformation services. Thus the Agri-Park concept involves integrating collective farming, farmer incubation programmes, Agri-Clusters, and Eco-Villages; while also contributing to land conservation and preservation. The Agri-Park concept comprises of three basic units: Agri-Hub Unit (AH). The Farmer Production Support Unit (FPSU). The Rural Urban Market Centre Unit (RUMC). A business plan for the Agri-Park in Sarah Baartman DM was developed in 2015 by the Department of Rural Development and Agrarian Reform and this information under review on the District Agri-Park seek to provide progress on the development of the Agri-Park and its components called Farmer Production Support Units (FPSUs). There are three priority commodities identified for the District Agri-Park will focus on not excluding other agricultural sectors driving the District Economy which are still the competitive and comparative advantage of the District: Red Meat production Citrus Vegetable and processing The District Agri-Park is coordinated by a District Management Council called (DAMAC). It is a body led by farmers and includes farmer representative groups from both emerging farmers and commercial farmers. Women and Youth are represented through organized structurers established by the Department of Rural Development and Agrarian Reform in the form of Women in Agriculture and Rural Development (WARD) and Youth in Agriculture and Rural Development (YARD). Progress reports are submitted periodically to Council for noting progress and appraisal. 55

56 DISTRICT AGRI-HUB SITE Based on a Sarah Baartman District Municipality Council decision the site of the Agri-Hub for the district is in the town of Addo, in Sundays River Valley LM. The farm and specific location is Santa Clara land owned by the state and Department of Rural Development and Land Reform with GPS coordinates ,33 S ,77 E. PROPOSED AGRI-PARK ZONE 56

57 PROPOSED DESIGN AGRI-PARK BUILDING PROGRESS TO DATE The development concept and the implementation guidelines which consists of high level costing and recommendations for the development of the Agri-Park in Sarah Baartman District is completed. Planning, high level design and built environment professional services are also completed and approved by the District Agri-Park Management Council. 57

58 SMALL ENTERPRISE DEVELOPMENT AND COOPERATIVE SUPPORT The District Municipality budgeted in the 2016/17 Financial Year to fund SMME development initiatives and Cooperatives that are supported by Local Municipalities included in their IDPs. The definition of the support covers the following elements of our funding envelop: - Direct Grant/Funding - Non-Financial support through training and participation in events - Repackaging of prospective business proposals towards credible and bankable business plans - Endorsement of potential business proposals to other agencies where District funding is limited - Information Platforms and Events related to SMME development There are four basic driving thrust/focus areas to consider in 2016/17 financial year: Job creation and Entrepreneurship development Start Ups Manufacturing and support of community based service sector - Ezasekasi Township Economy Strengthening Cooperatives Funding mobilisation through partnerships - Black Industrialists Mainstreaming Youth Entrepreneurship through targeted Events, partnership programmes introducing Information Communication Technology (ICT) in schools and to Youth out of school. 58

59 TOURISM DEVELOPMENT AND MARKETING The following Table indicates projects support in the financial year under review: NO Project Name Recommended Funding No of Beneficiaries Local Municipality Women vs Youth 1 Kwa Nojoli young designers R members BCRM Women and Youth 2 Inkwenkwezi future R members Dr Beyers Youth primary co-operative limited Naude, Jansenville 3 Ezama Mntambo (Pty) R members Kouga LM Women Ltd 4 Amahle waste recycling R members Kouga LM 5 Phummy s Catering & Supplies R members Makana Women and Youth 6 DZ Laundry Primary R members Makana Women cooperative 7 Riebeeck East R farmers Makana Commonage Famers 8 Nonzaliseko Project R Material, Machinery and Training Makana Women 9 Ndlambe Mobile Computer Centre 10 Sikhona Thina Cooperative R R Material, Equipment and Training Material, Machinery and Training 11 Tyson Tyre Services R Material, Machinery and Training 12 Ricka Beauty and Glamour R Material Equipment and Product development and Training 13 Clayton Transport R Business Development Transport and Logistics Ndlambe SRV Local Muni Makana LM SRV Local Municipalities Kouga LM Youth Youth N/A Youth 14 Sewage Group PTY (Ltd) R Business Kouga LM N/A Development 15 District Youth Economic R Event Ndlambe LM Youth Summit 16 Google Digital Skills R ICT rollout and All LMs Youth training 17 Injica Chicory Producers R Bush clearing in Chicory Farms 250ha N/A Ndlambe LM 400 Job creation opportunities 59

60 South Africa s tourism grew in tourist volumes by 2.8% compared to 2015 to a total of 34.3 million tourists. Domestic tourism although declining is the biggest contributor and is more than double the size of the international arrivals. South Africa growth in international tourist arrivals out grew both our key benchmarking destination in year on year growth from all regions. A total tourism revenue of approximately R102.1 billion was injected in the south African economy in This is a 11.1% increase compared to Almost 70% (R75.5 billion) was generated from the international tourist. Although rand strengthen against the major currencies this did not deter tourist from visiting South Africa and spending patterns. The number of nights per tourist was around 4 nights while the international tourist stayed around 9 nights. For International Tourist this is slightly shorter than usual while domestic travel trip was slightly longer. Bed-nights increased to a record high of million nights. Among domestic tourists the increased average length of stay was the main driver of bed-nights growth while among international tourist s volume was the main driver as average length of stay was down. The challenge is that majority of those bed nights were spent in unpaid establishments. Opportunity lies in converting those nights into a formal sector. In 2016 the market size of tourism in SA reached 34.3Mn trips (24.3Mn domestic trips and 10.0Mn international arrivals) this is a 2.8% growth compared to the 33.4Mn in In 2016 tourism market value size of tourism reached R102Bn (domestic R26.5Bn, international R75.5Bn) and this is 11.1% increase than the R91.8Bn in Domestic tourist s revenue: increased by 12.3% from R23.6 billion in This increase in domestic revenue was driven by tourists spending R20 more per day than usual and this resulted to additional R2.7 billion. Tourist increased the length of their holiday by 1.6% and this resulted to R0.4 billion in The domestic tourists who took a trip in this period spent more per trip and stayed longer than previous years. International tourist revenue: increased by 10.8% to record R75.5 billion. The growth in spent was driven by change in volume resulting in R8.7 billion; spend per day increased by 1.5% resulting to additional R1 billion rand, average length of stay dipped by -2.9% and resulted to a loss of close to R2 billion. The Rand strengthened against most currencies across the world. Improved in 2016 for both domestic and international tourists. Domestic provincial spread improved with 9.7% of tourists visiting more than one province in 2016 compared to 2.5% in International tourists also saw an improvement with 15.2% of tourists visiting more than one province in The most visited province in 2016 was Limpopo with 9.9 tourists and it was followed by Gauteng by 8.8 tourist. Eastern Cape, KZN, Mpumalanga and North West lost compared to Domestic trips source vs destination province: Western Cape and Limpopo grew in trips to other provinces. Northern Cape, Limpopo, Western Cape and Gauteng saw increases in tourists coming into their province growing by 89.5%, 47.2%, 19.9% and 16.2% respectively from VFR makes up 72.4% of Domestic trips and any growth or decline has a greater impact on the volume for the province as a whole. Gauteng, Western Cape, Limpopo and Northern Cape had growth in VFR trips that was a major driver of the growth in trips in Holiday, 60

61 Business, religion and Medical tourist s growth or decline has little to no impact on Domestic volume. International provincial spread: All provinces saw growth in share of International tourists in 2016 and Free State led growth. Northern Cape was the only province to decline in 2016 with -9.6% less International tourists and has been on a downward trend. Mpumalanga and North West are the only province not to see a dip in 2015 and continued to grow in VFR makes up 38.5% of International tourist volume, while Holiday and Business make up 22.1% and 20.8% respectively. These three purposes are 81.4% of all International tourists and any growth or decline has a greater impact on the volume for the province as a whole. Religion and Medical tourist s growth or decline has little to no impact on International tourist volume. Baviaanskloof World Heritage Site Tourism Development Plan Sarah Baartman District Municipality, in partnership with the Eastern Cape Parks and Tourism Agency (ECPTA), developed a Tourism Development Plan for the Baviaanskloof World Heritage Site. Tourism development opportunities were developed in targeted nodes in the Baviaanskloof, which is part of the Cape Floristic Region and one of only eight World Heritage Sites in South Africa. The District Municipality, in collaboration with ECPTA, have submitted a funding proposal to the National Department of Tourism for improvement of signage that meets World Heritage Site standards and establishment of the Interpretive Centre to be located at the western entrance of the Baviaanskloof. An announcement in this regard was done by the Minister of National Department of Tourism during 2014 Tourism Month. As a result the project for establishment of interpretive signage is scheduled to be implemented in 2017/18 financial year by National Department of Tourism Support To Local Tourism Organisations The Sarah Baartman District Municipality, in its Integrated Development Plan, committed to rendering financial support to local tourism organizations located in the District. The primary aim of this support is to assist in efforts to market destinations within the district. During the financial year under review, the Sarah Baartman District Municipality has supported Makana, Blue Crane Route, Sundays River Valley, Ndlambe and Kouga Local Tourism Organisations, by providing funding to these organizations to continue to promote important tourism nodes in the district. Most importantly; Sarah Baartman District Municipality continues to support these LTO s institutionally to ensure sustainable existence of these entities. 61

62 Development of Tourism Statistics System Sarah Baartman District Municipality undertook tourism research to identify the number visitors to the District. The objective of the research was based on: 1. Conducting pilot tourist visitor and product owner surveys in selected locations in the Sarah Baartman District over the summer, autumn (Easter period) and winter tourism peak season(s). 2. Upgrade of an on-line tourism statistics database for the SBDM which will allow users throughout the SBDM to access reliable statistics on tourism in the area, and update the statistics based on future surveys conducted in the local areas. The system was populated with the data collected in the pilot tourism surveys and it has been installed and linked with the 7 Wonders website. Visitor surveys were conducted in local municipalities by surveyors based in towns within the LMs those and the application statistics system has been developed and will be linked to the municipality website. Sarah Baartman"7 Wonders of our World" campaign The Sarah Baartman District Municipality continued to roll-out its "Seven Wonders" campaign, in terms of which seven tourism destinations within the District were vigorously marketed. This roll-out is in line with the implementation of the District marketing strategy. The campaign was again piloted at the 2016 Tourism Indaba held in Durban and 2015 Gauteng Getaway Show in Johannesburg with Local Tourism Organisations on board. The campaign s digital media strategy has been rolled out through social media and the destination is gaining a positive reputation. The Sarah Baartman District Municipality has won the following accolades during previous financial years as a result of the Campaign: Eco-adventure Sport Destination: Swiss Tourism Awards in 2009, Rebrand 100 Global Awards Winner: Merit Award in 2011, Sarah Baartman 7 wonders tourism brand website: Web Design Award in 2012, 2 nd Best Local Tourism Destination in the 2014 Gauteng Getaway Show. In 2015 the District as tourism destination through 7 Wonders Campaign earned itself a merit award as the Best Local Tourism Destination at the Gauteng Getaway Show. 62

63 Support to Creative Industries Numerous local, national and international festivals take place within Sarah Baartman District each year. The District Municipality has provided financial support to one festival during the year under review. Support to the National Arts Festival in 2016/17 financial year from the Sarah Baartman District Municipality was based on four key projects: Sarah Baartman productions, Creative City, Community Outreach, Closing Street Parade Involving Local Artists. The primary focus of these projects was to embark on sustainable development of local talent and create space for local artists to perform in the mainstream other festivals around the world. Another project supported is with Robert Sobukwe Foundation in Dr Beyers Naude Local Municipality. Support to Tourism Sector Development The Sarah Baartman District Municipality, in its Integrated Development Plan, committed to rendering financial support to local municipal development projects located in the District. The primary aim of this support is to assist in efforts to develop destinations within the district. During the financial year under review, the Sarah Baartman District Municipality has supported Blue Crane Route, Makana, Kouga and Dr Beyers Naude Local Municipality, by providing funding to these municipalities to continue to develop important tourism nodes in the district. Tourism Infrastructure Investment (Establishment of Greater Addo Tourism Route) Various campaigns were undertaken to raise awareness of the destination brand. Sarah Baartman District Municipality is establishing Greater Addo Tourism route as a flagship initiative. Greater Addo Route signage will play a vital role for tourism businesses and leisure attractions in the area including the themed Greater Addo Route to help in identifying the location and what can be found at certain places. This shall include directional, comfort and locational signs along the route as well. The objective of this project is to identify and secure appropriate sites along major routes for the placement of Greater Addo Route signage and secondary to that, tourism packages will be prepared with competitive destination promotion roll-out. The project has now been completed through installing Tourism Route Signage. 63

64 COMPONENT D: COMMUNITY & SOCIAL SERVICES This component includes: libraries and archives; museums arts and galleries; community halls; cemeteries and crematoria; child care; aged care; social programmes, theatres. INTRODUCTION TO COMMUNITY AND SOCIAL SERVICES In the SBDM, this function includes activities associated with provision and upgrading of cemeteries, community halls, libraries and crèches, programmes for the empowerment of Youth, Women and the Disabled, programmes towards mitigation of the effect of HIV and Aids on communities, and heritage related matters. Strategic Objectives The strategic objectives of this function are: to ensure that communities are provided with facilities they need in terms of social upliftment and human dignity to improve the HIV and Aids status of the community to ensure the empowerment of designated groups of Sarah Baartman Youth Development: Entrepreneurship Training: In ensuring Youth Development in Sarah Baartman District Municipality, Special Programmes Unit has partnered with National Youth Development Agency and has rolled out Entrepreneurship Training with Dr. Beyers Naude, Blue Crane Route, Ndlambe, Sundays River Valley and Kouga Municipality. These training targeted young people who are aspiring and established SMME s owned by young people with an intention to equip them with information ranging from marketing, research, business plan development. The training is also serving as a prerequisite for SMME s to access funding in a form of Grant and business products. Through these Entrepreneurship Trainings, two Cooperatives from Makana Municipality and two Close Cooperation s from Kouga were received funding from National Youth Development Agency. Eastern Cape Youth Indaba: The Provincial Department of Economic Development & Environmental Affairs and Tourism in partnership with Sarah Baartman District Municipality hosted a Provincial Youth Economic Indaba that was hosted in Ndlambe Municipal area in particular Port Alfred. One of the objectives of the Indaba was: 64

65 To create a platform for sharing of business /investment opportunities in the identified economic sectors value chains. To create a platform for dissemination of information on funding/financing/procurement and market access opportunities that is obtained in the identified sectors. Disability Empowerment: Job Readiness & Self Employment Training: In empowering People with Disabilities, Eastern Cape Disability Economic Empowerment Trust funded by Engen has partnered with Sarah Baartman District Municipality and facilitated a Job Readiness and Self Employment Training. Disability Sector across the District was invited to participate in the training. This time around the focus was targeting young people with disabilities that has completed grade 10 as a minimum requirement. The training was an accredited training and funded by W&ASETA. Disability Sensitization Workshops: Sarah Baartman District Municipality facilitated Sensitization Workshop for Dr. Beyers Naude Municipal Officials and Disability sector in general. Due to the amalgamation of the former Camdeboo, Ikwezi and Baviaans we saw a need to sensitize officials and the sector on issues of Disabilities. HIV, TB, STI and Aids Coordination Supported three LMs with an Induction Programme of Local AIDS Councils and the development of their Operational Plans (Ndlambe, Kouga & Dr Beyers Naude) Conducted an outreach on Sexual Reproductive Health Care and Rights School Program from Jan- Feb 2017, 3 LMs benefited ( Ndlambe, Makana & Dr Beyers Naude) Supported Ndlambe to host the District World TB Day in Bathurst Supported Makana to launch the Child Protection Nathaniel Nyaluza High School Conducted an Advocacy Programme on Lesbians, Gays, Bisexual, Transgender & Intersexual (LGBTI) in Graaff Reinet (Dr Beyers Naude) Supported Ndlambe to host an Anti- Substance Abuse Campaign in Alexandria Supported Dr.Beyers Naude to host the District World AIDS Day in Steytlerville Supported Dr Beyers Naude to host an Interfaith Prayer Service in Janesville Supported Koukamma to launch the 16 Days of Activism in Ravinia Supported Ndlambe to host the Provincial Closure of 16 Days of Activism in Port Alfred 65

66 3.12 LIBRARIES, COMMUNITY FACILITIES INTRODUCTION TO LIBRARIES AND COMMUNITY FACILITIES The Sarah Baartman District Municipality is not responsible for delivery of library services and other community facilities in the District. In the prior years the SBDM built libraries in several local municipalities. However in 2016/2017 no such projects were implemented. No dedicated personnel are allocated to the function of provision and/or upgrading of libraries and other community facilities within the municipality. Staff employed for other ongoing infrastructural and administrative functions is utilized for this purpose on an ad-hoc basis. Key Issues for 2016/2017 Maintained Connect with Sarah Baartman system in 32 libraries throughout the District, which provides access to internet and a range of educational software for use, free of charge, by communities. There are currently approximately users of the system Unfortunately no funding has been received from the Department of Sport, Recreation, Arts and Culture (DSRAC) for this purpose. DSRAC however is in the process of installing WiFi at the libraries. This is currently operational in some of the libraries. The district municipality is however assisting DSRAC in connecting the libraries onto the WiFi system. The SBDM has subsequently terminated its provision of internet and at the libraries CEMETERIES AND CREMATORIUMS INTRODUCTION TO CEMETERIES & CREMATORIUMS The SBDM was not involved in any projects related to cemeteries and crematoriums during the year under review CHILD CARE, AGED CARE, SOCIAL PROGRAMMES INTRODUCTION TO CHILD CARE, AGED CARE, SOCIAL PROGRAMMES The SBDM has a Special Programmes Unit which takes care of these functions. The key issues undertaken during the year under review are: 66

67 Special Programmes Hosting of various programmes in partnership with the Provincial Women Caucus Conducting empowerment session for women in business Forming partnerships with sector departments in implementing district wide projects related to empowerment of designated groups Hosting of Commemoration days HIV and Aids Conducting of HCT Campaign across the district Hosting of an Internal HCT Drive for SBDM employees Commemoration of the 16 Days of Activism and District World Aids Day Number of personnel associated with the Community and Social Services Function: 1 Special Programmes Officer 1 HIV and Aids Coordinator COMPONENT E: ENVIRONMENTAL PROTECTION This component includes: pollution control; biodiversity and landscape; and coastal protection. INTRODUCTION TO ENVIRONMENTAL PROTECTION In the SBDM, the function includes the following activities: Water Quality Monitoring Food control Waste Management Health surveillance of premises Pauper Burial Surveillance and Prevention of Communicable Diseases Vector control Environmental pollution control Disposal of the dead Chemical safety Environmental Health Education Sessions and Awareness Campaigns/ Programmes 67

68 The function as rendered by the Municipality excludes Port Health, Malaria Control and Hazardous Substances which is the function and the competency of the Eastern Cape Department of Health POLLUTION CONTROL INTRODUCTION TO POLLUTION CONTROL Sarah Baartman District Municipality is embarking on development of a District Wide Environmental Pollution Control plan which includes a waste management strategy and other environmental management strategies. The SBDM did not have the capacity to deal with this issue in the previous year. SERVICE STATISTICS FOR POLLUTION CONTROL Not applicable 3.16 BIO-DIVERSITY; LANDSCAPE (INCL. OPEN SPACES); AND OTHER (EG. COASTAL PROTECTION) INTRODUCTION BIO-DIVERSITY AND LANDSCAPE The function of biodiversity and landscape is administered jointly by the Economic Development and the Infrastructure & Planning Department and includes activities related to the protection of flora and fauna species, the protection of habitats and the protection of landscapes for their aesthetic values.. At present the main activities are : ensuring participation by local municipalities in biodiversity capacity building programmes; and participating in meetings of planning forums such as the Greater Addo (SANParks) Planning forum, the Baviaanskloof Mega-Reserve Steering Committee, the Eastern Cape Biodiversity Implementing Committee, as well as the Coastal Management Steering Committee. The strategic objective of the function is to safeguard the District s biodiversity in terms of indigenous plants and animals and the processes that sustain them Sarah Baartman District Municipality signed an Memorandum Of Understanding with Department Environmental Affairs to second an incumbent to specific deal with Environmental management within the District. 68

69 SERVICE STATISTICS FOR BIO-DIVERSITY AND LANDSCAPE Not applicable 69

70 COMPONENT F: HEALTH This component includes: clinics; ambulance services; and health inspections. INTRODUCTION TO HEALTH The District Municipality does not render Primary Health Care Services, or ambulance services. This is the competency of the Eastern Cape Provincial Department of Health. The District Municipality renders Municipal (Environmental) Health Services which includes health inspections CLINICS Not applicable 3.18 AMBULANCE SERVICES Not applicable 3.19 HEALTH INSPECTION; FOOD AND ABATTOIR LICENSING AND INSPECTION; ETC (ENVIRONMENTAL HEALTH SERVICES INTRODUCTION TO ENVIRONMENTAL HEALTH SERVICES The function of Municipal Health Services in the Municipality is administered as follows: The Municipality has entered into agreements with seven of its local municipalities: Kouga, Blue Crane Route, Makana, Ndlambe, Sundays River Valley Koukamma and Dr Beyers Naude to render MHS on its behalf in their respective areas of jurisdiction. The function includes the following activities: Water Quality Monitoring Food control Waste Management Health surveillance of premises Pauper Burial Surveillance and Prevention of Communicable Diseases Vector control Environmental pollution control 70

71 Disposal of the dead Chemical safety Environmental Health Education Sessions and Awareness Campaigns/ Programmes The function as rendered by the SBDM excludes Port Health, Malaria Control and Hazardous Substances which is the function and the competency of the Eastern Cape Department of Health and National Department of Health. The strategic objectives of this function are to improve the health status of communities serviced through the identification, evaluation and control of critical factors that affect the physical, social and mental wellbeing of communities. MHS/EHS are mainly preventative health services, and are therefore largely protecting public health and preventing health hazards/risks and diseases. Key issues for 2016/2017: Highlighting and reporting a district overview of water quality in structures such as Mayoral Committee, District Wide Infrastructure Forum, Municipal Managers Forum and the District Mayor s Forum. Maintenance of Environmental Health Joint Management Committee with all local municipalities. Awareness projects were held in all local municipalities rendering EHS: Dr Beyers Naude, Kouga, Koukamma, Blue Crane, SRVM, Ndlambe, Camdeboo and Makana Municipalities on waste management, health and hygiene, and an animal outreach program. Waste management and clean-up campaigns were conducted in SRVM, Blue Crane Route, Makana, Ndlambe, Kouga, Camdeboo and Koukamma municipalities Review of Integrated Waste Management plans for Makana, Koukamma, Ndlambe, SRVM, Blue Crane Route LM, and Ikwezi is finalised Development of Air Quality Management Plan for all LMs in the Sarah Baartman District so as to manage ambient air quality for the DM is finalised. The quality of water and food was monitored through routine inspections and drawing of water and food samples throughout the District. Disease outbreak monitoring executed with LMs in relation to both water-borne and food-borne diseases such Cholera, Shigella Dysentery and Food Poisoning throughout the District. All EHPs were trained and workshopped on the New Environmental Health Norms and Standards DM has standardized all its inspection tools and certificates The total budget for the Environmental Health Service in the financial year 2016/17 was R10, This amount includes the SBDM Head Office budget that is also used to service Ikwezi and Baviaans 71

72 (now part of Dr Beyers Naude) local municipalities and an allocation and subsidy to 7 Local Municipalities that have entered into a service level agreement with SBDM. SBDM contributions/subsidies to local municipalities for rendering EHS/MHS have increased substantially over the years from In the 2013/14 financial year the subsidy was based on R21.96 per capita, totalling to an amount of R ,00 from National Treasury, which indicates under funding of this service since the calculation is based on the 2001 Census population. In the financial year 2013/14 SBDM s total contribution to Local Municipalities increased to R , 00 which is R23, 24 per capita. During 2015/16 contributions totalling to R were paid to the LM s. During the financial year 2016/17, contributions totalling to R10, 000, 000 were paid to LMs as follows: Municipality Kouga Makana Amount R2,333, R1,903, BCR R Camdeboo Ndlambe R1,207, R1,448, SRV R 1,290,689,00 Kou kamma Total R R10, Number of personnel associated with the Environmental (Municipal) Health Function: 1 Environmental Health Manager 2 Environmental Health Practitioners COMPONENT G: SECURITY AND SAFETY This component includes: police; fire; disaster management, licensing and control of animals, and control of public nuisances, etc. INTRODUCTION TO SECURITY & SAFETY 72

73 The only functions in this component performed by the SBDM are Disaster Management and Fire Services 3.20 POLICE Not applicable 3.21 FIRE INTRODUCTION TO FIRE SERVICES Local Municipalities in the District perform firefighting services on an agency basis for the SBDM. The District Municipality is involved in specific projects such as construction of fire stations, emergency response centres, purchase of fire tenders, standardisation of fire hydrants, etc. The function of firefighting within the municipality is administered within the Disaster Management Centre and includes: planning, co-ordination and regulation of fire services throughout the Sarah Baartman District provision of specialized firefighting services such as mountain, veld and chemical services co-ordinating of the standardization of infrastructure, vehicles, equipment and procedures training of fire officers Strategic Objectives: Assist local municipalities with the development of fire services plans for their areas Assist each local municipality with the implementation of its fire services plan by rendering support with: o establishment of satellite fire stations in identified areas o recruitment of fire fighters, reservists and/or volunteers o Restoration of fire hydrants district wide o acquisition of fire/rescue vehicles, equipment and tools o training of fire officers, fire fighters, reservists and volunteers Lobby for funding to assist local municipalities with implementation of their fire services plans Prepare business plans where necessary to secure funding Make general public aware of the dangers of fires Key issues for 2016/2017 Contribute towards fire services at Local Municipalities by: Restoration of Fire Hydrants in Kouga, Ndlambe and Makana Local Municipalities. Contribute towards fire station in Bushmansriver Mouth, Ndlambe Municipality. 73

74 Contribute towards building of a new fire station in Sanddrift, Koukamma Local Municipality. Contribute towards the building of a new Integrated Emergency Centre in Paterson, SRV. Contribute and handing over of new fire equipment and Rescue System to Makana Fire Service. Provide financial assistance to all nine LMs for rendering fire services in their areas in terms of a Service Level Agreement as per an agreed formula. municipalities as per agreed formula. Funding Sarah Baartman District Municipality has made an amount of R available for Fire Services for the 2016/2017 financial year. No funding was received from Department of Provincial and Local Government. Staff complement in the fire service unit: 1 x District Fire Services Co-ordinator 7 x Fire Reservists 3.22 OTHER (DISASTER MANAGEMENT, ANIMAL LICENSING AND CONTROL, CONTROL OF PUBLIC NUISANCES AND OTHER) INTRODUCTION TO DISASTER MANAGEMENT The Disaster Management Act No.57 of 2002 requires municipalities to establish functional Disaster Management Centers in their areas of jurisdiction. Sarah Baartman District Municipality is in full compliance with this legislation as the Centre was established to serve the people of Sarah Baartman District Municipality. A lot of measures in capacitating institution have been achieved to ensure compliance with the disaster management legislation. The function is being performed within the municipal building. Whilst hazards are inevitable, and the elimination of all risks impossible, there are many technical measures, traditional practices and public experiences that can reduce the extent or severity of economic, environmental and social disasters. 74

75 Strategic Objectives: Mitigate disasters in the Sarah Baartman District Support and Capacitate local municipalities within the District and Communities at Risk on Disaster Risk Management issues. Description of activity The main activity is to coordinate disaster management activities in the Sarah Baartman District consistent with the provisions of the Disaster Management Framework and Disaster Management Act 57 of The framework covers the following KPAs: Establishing integrated institutional capacity for disaster risk management in the District Disaster Risk Assessment A comprehensive risk assessment for the District in accordance with national and provincial standards and supporting guidelines must be conducted. Disaster Risk Reduction Disaster risk reduction programmes must be developed and implemented Disaster Response and Recovery Centre must identify agencies with responsibilities for the various operational activities associated with disaster response and recovery. The key issues for 2016/2017: The district municipality appointed Aurecon to conduct disaster risk assessment for the district and its seven local municipalities. Workshops were conducted in all seven local municipalities including the district municipality with regard to risks and history of disasters or incidents within the district. Risk reduction program which was conducted in Pearston (Blue Crane Route) municipality; where fifteen disaster management volunteers were trained as artisans was finalized in October The house that was rebuilt by the volunteers as a risk reduction project was handed over to the beneficiary by Executive Mayor (Ms. K.E Kekana). A disaster management symposium was held on the 22 nd 24 th of February 2017 in Grahamstown. The Sarah Baartman District Municipality (SBDM) was affected by drought and the SBDM Council declared a local state of a disaster. Submission was done to the EC Cogta Provincial Disaster Management Centre for the declaration to be gazetted. As part of Santam and SBDM (Partnership for Risk and Resilient) ; volunteers were trained on disaster management ; basic firefighting; and first aid in the following local municipalities by Red Cross: 75

76 o Blue Crane Route Municipality o Kou Kamma Municipality o Kouga Municipality o Ndlambe Municipality, o Santam also donated smoke alarm fire detectors to SBDM as some form of reducing fires to informal settlements within the district. The district installed the smoke alarms at Sea Vista informal settlement as a pilot project. The aim is to roll out this project to other local municipalities. International Strategy Disaster Reduction (ISDR) celebration was held in October 2017 in Port Alfred (Ndlambe local municipality) Number and cost of all personnel associated with the function: 1 Division Head 1 Operations Manager 1 Training Officer 4 Satellite Officers 1 Secretary 4 Control Room Operators TOTAL COST R Funding for the Disaster Management function remains a challenge for the District Municipality. COMPONENT H: SPORT AND RECREATION This component includes: community parks; sports fields; sports halls; stadiums; swimming pools; and camp sites SPORT AND RECREATION INTRODUCTION TO SPORT AND RECREATION The SBDM has in previous years been involved in construction of sports fields in local municipality areas as a community services function. However, during the year under review, no sports fields were constructed by the SBDM, and this function is accordingly not applicable. 76

77 COMPONENT I: CORPORATE POLICY OFFICES AND OTHER SERVICES This component includes: corporate policy offices, financial services, human resource services, ICT services, property services EXECUTIVE AND COUNCIL This component includes: Executive office (mayor; councilors; and municipal manager). INTRODUCTION TO EXECUTIVE AND COUNCIL Information relating to the Executive and Council is contained in Chapter 2 Component A Political and Administrative Governance FINANCIAL SERVICES As a District Municipality, we do not provide basic services and the information required is not available. Refer to the Municipal Manager s Overview on financial matters page HUMAN RESOURCE SERVICES INTRODUCTION TO HUMAN RESOURCE SERVICES The SBDM approved a Strategic Human Resource Management Plan ( ) which is a statement on how the Municipality seeks to achieve the objectives in the IDP. The plan is now in the process of being reviewed and aligns the Human Resource Management Goals and Strategies with SBDM s IDP. Priority Objectives The Plan includes key areas as detailed below: 1. Human Resource Management Key policies were reviewed during the year and checklists were introduced to improve compliance with laws and regulations. Strategies were also introduced to improve communication. 2. Human Resource Provisioning Recruitment and selection practices were 77

78 developed to promote efficient systems to speed up the filling of vacancies. orientation programmes were also improved. Induction and 3. The performance of all employees is appraised on a quarterly basis by using the Performance Management System. These reviews, as well as intervention strategies, have improved the performance of employees. Integrated health, safety and wellness programmes are being developed to assist in improving the morale of employees. 4. Human Resource Development Each year a Skills Audit is conducted and a Workplace Skills Plan is developed. The training programmes have improved skills and capacity in the institution. Adequate budget provision has been made for all senior and middle managers to undergo Minimum Competency Training as required by the regulations of National Treasury. 5. Labour Relations During the year under review, strategies were adopted to improve labour relations and regular Local Labour Forum meetings with the labour unions were held to consult on many labour related issues. SERVICE STATISTICS FOR HUMAN RESOURCE SERVICES Employees: Human Resource Services Job level 2015/ /2017 (TK LEVEL) Employees Posts Employees Vacancies (Fulltime Vacancies (% of total posts) equivalents) % % Capital Expenditure 2016/2017 : Human Resource Services Capital projects 2016/2017 Budget Adjustment budget Actual Expenditure Variance from original budget Total Project value Project A: Integrated mscoa System was budgeted and approved 78

79 The mscoa System (SAGE) was procured during the year. The system has a comprehensive integrated Human Resource module which utilises VIP for payroll purposes. The system will be effective from 1 July

80 3.27 INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) SERVICES This component includes: Information and Communication Technology (ICT) services. INTRODUCTION TO INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) SERVICES The main focus during the year was addressing the findings raised in the Information Systems Audit of general controls surrounding the Windows, Linux and APPX Systems conducted by the Auditor General in both 2014 and 2015 financial year. Many risk areas in the ICT environment were raised that require attention. The Auditor General s (AG) report and findings covered the following areas: - User Access Management - Security Management - IT Services Continuity - Programme Change Management - Internal Vulnerability Review The root causes for many of the findings relate to mainly inadequate policy and procedures as well as capacity and resource constraints. The report includes many recommendations for improving the ICT control environment and the report was considered by the Audit Committee. An ICT Audit Plan was prepared to implement the recommendations of the AG indicating the tasks, the responsible persons and timeframes. Addressing these findings was delayed by the fifteen month vacancy of the Systems Administrator position, which was eventually filled on 3 August 2015, after numerous attempts at appointing a suitable candidate. The ICT environment is ever-changing and there are many significant risks related to projects detailed below which have to be carefully managed: - Dealing with ICT Audit and Improvement of Controls; - Implementation of SCOA Regulations; - Determining the future of the APPX Financial Systems Software. - Determining the future approach to Server Infrastructure and Server Support Systems; In attempting to address the issues raised by the Auditor-General, it was evident that the A-G was making reference to the Municipal ICT Corporate Governance Framework. 80

81 The purpose of the framework is to institutionalise the Corporate Governance of ICT as an integral part of corporate governance within the municipality in a uniform and coordinated manner using a prescribed set of principles and practices. When the framework is effectively implemented and maintained, the benefits that will be realised include the following: i. Establishment of ICT as a strategic enabler in the municipality ii. Improved delivery of ICT service quality; iii. Improved stakeholder communication; iv. Improved trust between the municipality and the community through the use of ICT; v. Lower costs (for ICT functions and ICT dependent functions) vi. ICT risks managed in line with the ICT priorities and risk appetite of the municipality; vii. Appropriate security measures to protect both the municipality s and its employees information; viii. Improved management of municipal-related ICT projects; ix. Improved ICT ability and agility to adapt to changing circumstances; and x. ICT executed in line with legislative and regulatory requirements. The ICT Unit has accepted the Framework as a basis in addressing the findings raised by the A-G, of which many findings were policy-related. The following ICT documents and policies were therefore either reviewed or developed: - Change Management and Control Policy - User Access Management Policy - Security Management Policy - Disaster Recovery Plan - Code of conduct The Municipal ICT Corporate Governance Framework, together with an implementation plan and the above policies are planned for submission to Council for adoption. With the lack of adequate financial resources the ICT division has to focus on becoming more cost efficient while striving to improve the quality of ICT services delivered to the user departments. The measurement and management of costs are critical when considering any strategies relating to the provision of ICT services. The municipality continued to outsource the support and maintenance of the in-house systems software to a service provider during the year. Management together with the service provider has been able to make all the systems software changes to accommodate the new legislation and reporting changes impacting on the financial system. Besides the Microsoft products of , Word, Excel and PowerPoint, various other sub-systems are 81

82 managed through the main IT system, for example, the Performance Management System, the Connectwith-Sarah Baartman library internet and information system, the Geographical Information System (GIS) and Disaster Management information systems. MSCOA IMPLEMENTATION It is evident that the introduction of the standard chart of accounts which must be implemented on 1 July 2017 is a complex project that must be carefully managed. It will have a major impact on the ICT environment. The Council has approved the mscoa Steering Committee and the Project Implementation Committee (PIC) to ensure the effective implementation of the new Standard Chart of Accounts. In an attempt to manage this reform, the PIC has developed the mscoa Risk Register as well as an Implementation Plan. The following activities were performed during the year: Terms of reference for the municipality s mscoa project team were approved; Proper document management for the mscoa project and municipal records are maintained; The existing municipal chart was matched to the regulated Municipal SCOA classification framework; Matched the existing vote, cost centre and budget structures operational in the municipality to the Function Segment of the Municipal SCOA classification framework; mscoa is a business reform, all senior managers across the municipality were incorporated into the project through internal awareness and information sharing; As the Municipality has achieved a clean audit, with a strong internal control environment, it would want to continue with its current financial system where possible. The current service provider who supports and maintains the in-house financial systems was tasked with developing the new Standard Chart of Accounts. The service provider has progressed well on the development. Unless adequate resources are made available to successfully convert the in house APPX system it may be necessary to procure new financial systems software, significantly increasing the cost of ownership which currently amounts to R1.8 Million per annum. 82

83 The risks identified in ensuring that the municipality is mscoa compliant are detailed below: Priority number Risk name Mitigating action plans to address the inherent risk exposure 1 Workflow of IDP and Budget process not in line with prescribed methodology 2 Inadequate documented planning and costing of projects 3 Not meeting the implementation date of 1 July Lack of understanding of mscoa by management and employees 5 Non-comparable prior year figures in AFS 6 In house financial system's ability to comply with mscoa requirements 7 Non adherence to implementation of mscoa by management and employees The IDP and Budget Process Plan for 2017/2018 (Approved by Council by 31st August 2016) must include timeframes which indicates the completion of the IDP Processes prior to the commencement of the Budget Processes A Project Business Case template, which includes an mscoa template, must be completed for each project to be included in the IDP. 1. Fill vacancies in Finance Section urgently. 2. A KPI must be included in the performance plans of Directors, Managers, and key finance officials to address required actions emanating from mscoa Implementation Plan. 1. Awareness campaign on mscoa. 2. Training initiatives on mscoa Obtain clarification from National Treasury and Auditor General on the requirements of matching. 1. Fill vacancies in Finance Section urgently. 2. Initiate interaction between SBDM and NT/PT on mscoa development Workshops on mscoa and Change Management. The municipality is therefore striving to address the risks and the implementation plan to ensure that the municipality is mscoa compliant. 83

84 3.28 PROPERTY; LEGAL; RISK MANAGEMENT AND PROCUREMENT SERVICES This component includes: property; legal; risk management and procurement services. INTRODUCTION TO PROPERTY; LEGAL; RISK MANAGEMENT AND PROCUREMENT SERVICES Risk Management and Procurement services have been covered under 2.6 and 2.8 above respectively. Property The SBDM currently operates its administration and all its Council affairs out of one administration building. The Municipality has several investment properties in various parts of the District. The manner in which they are classified, their location, size, values etc are contained in the Asset Register. Legal Services There is one Senior Manager: Legal Services who is responsible for litigation, to ensure compliance with all relevant Acts and Regulations, provide legal opinions in legal actions leveled against the Municipality, give advice on labour matters, assist in investigations relating to disciplinary hearings, prepare legal documents such as lease agreements, contracts etc, provide legal support to local municipalities and attend to all legal matters of the municipality. There are however complex legal issues that are dealt with by external legal service providers, Chris Baker & Associate Attorneys, and Goldberg & De Villiers Inc. SERVICE STATISTICS FOR LEGAL SERVICES 1. Management of litigation a. Favourable cases - Nil b. Unfavourable cases - Nil There are six (6) pending cases that have not been finalized, as detailed hereunder: 84

85 Case name Nature of the case Date of Reasons for extensive commencement duration D S Van der Illegal occupation of farm July 2013 The matter is not yet Westhuizen/SBDM & land by community ready for trial, once the Others members of SRVM, pleadings close, a trial date will be requested from court. Kelvin Atkinson v Fire damages claim, June 2014 The matter was set down SBDM ( St Francis for trial on Bay Fires) November 2016 and proceeded and was adjourned to the November PF Cerff/ SBDM Fire damages claim, July 2015 The matter is still in the pleading stage Koukamma Claim for services June 2016 Matter is put in abeyance LM/Sarah Baartman rendered for fire function pending negotiation to DM resolve it amicably DM Konzani v SBDM Labour matter October 2016 The matter is defended SRV Contractors V SBDM & Other Construction dispute April 2017 The matter is defended 2. Default judgments - Nil 3. Prevention mechanisms of current litigations The SBDM Risk Management Strategy incorporates the assessment of legal risk and the strategies that can be put in place as prevention mechanisms for such risks as identified. Every year a workshop on Risk Management is conducted. 4. Criminal matters emanating from corruption and fraud currently there are three matters that are emanating from circumvention of the supply chain management policy, financial misconduct and a fraud case that have been reported to the Commercial Crimes Unit. These cases are still pending investigation and finalization by SAP and Court. 5. Management of Legal Risks 85

86 There is no specific policy dealing with management of legal risk, this is dealt with in the Municipality s Risk Management Strategy. COMMENT ON THE PERFORMANCE OF PROPERTY SERVICES OVERALL: All investments are made on property belonging to local municipalities. These have become assets of the local municipalities. COMPONENT J: MISCELLANEOUS Not applicable to SBDM COMPONENT K: ORGANISATIONAL PERFORMANCE SCORECARD This component includes: Annual Performance Scorecard Report for the current year. 86

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92 CHAPTER 4 CHAPTER 4 ORGANISATIONAL DEVELOPMENT PERFORMANCE (PERFORMANCE REPORT PART II) COMPONENT A: INTRODUCTION TO THE MUNICIPAL PERSONNEL 4.1 EMPLOYEE TOTALS, TURNOVER AND VACANCIES Employees Description 2015/ /2017 Employees Approved Employees Vacancies Vacancies posts No No No No % Water and Sanitation (1 became vacant during December % Housing None PMU % Roads and Transport % Planning % Local Economic Development (1 became vacant during October 2016) Environment Protection (EHS) (became vacant in Dec 2016) 42% 33% Corporate Policy and other % Disaster Management /Fire None None Office of Municipal Manager % Finance % Infrastructure Services (1 became vacant during October 2016) 25% Totals % Vacancy rate: 2016/

93 Total approved Vacancies Vacancies posts Designations No No % Municipal Manager CFO Other S57 Managers (excl Finance posts) Other S57 Managers (Finance posts) Police officers N/A N/A % Fire fighters Professionally Qualified & Experienced Specialist/Mid Management TK (excl Finance posts) Professionally Qualified & Experienced Specialist/Mid Management TK ( Finance posts) Skilled Technical & Academically Qualified /Junior Management TK 9-13 (excl Finance posts) Skilled Technical & Academically Qualified /Junior Management TK 9-13 (Finance posts) % % % % Total COMMENT ON VACANCIES AND TURNOVER: Section 54A and Section 56 Managers were appointed in 2011/2012 and the posts became vacant during the 2016/17 financial year. To date the Accounting Officer position and Director Finance and Corporate Services have been filled successfully. The Council is on a recruitment drive to fill the other two vacant section 57 post. COMPONENT B: MANAGING THE MUNICIPAL WORKFORCE INTRODUCTION TO MUNICIPAL WORKFORCE MANAGEMENT Over the course of the year, the SBDM developed and updated several policies. These policies are normally canvassed firstly at the Local Labour Forum and then submitted via the Mayoral Committee to Council. All staff has subsequently received copies of the policies. 93

94 4.2 POLICIES HR Policies and Plans Name of policy Completed Reviewed Date adopted by Council or comment on failure to adopt 1 Recruitment and Selection Policy 100% - part of Recruitment and Selection Policy Currently The policy needs to be reviewed to be in line with the revised Equity Plan and Task Grades. 2 Unemployed Graduate/Interns 100% Currently June 2014 Policy 3 Code of conduct for employees 100% Not applicable Adopted from 4 Disciplinary Code and Procedures 100% National Competence, of SALGBC. Systems Act The Code expired and Parties are negotiating a new agreement. 5 Landline Telephone Usage policy 100% Currently Policy to be reviewed to cater for the new system provided functionalities. 6 Employment Equity 100% Not required Adopted by Council in Annual reporting is done to the Department of Labour. 7 Grievance Procedure 100% Entrenched in the Main Collective Agreement (MCA) 8 HIV and AIDS 100% National Competence, discussed and finalised at SALGBC New MCA effective until 2020 Current Policy Extended by means of a circular from the SALGBC. 9 Human Resources Development (In conjunction with study assistance policy) 100% Currently New developments and changes to the Training landscape require this policy 94

95 10 Job Evaluation 100% Policy adopted in Employee Wellness 100% Currently under review. 12 Leave 100% BCEA and Collective Agreement to be amended in conjunction with the Study Assistance policy. To be reviewed to incorporate new developments and customisations. Awaiting Council approval. Adopted from the SALGBC Collective Agreement with amendments. June Subsistence and Traveling Policy 100% Currently being reviewed 14 Official transport to attend funerals 100% Under Review. Awaiting Council approval. 15 Organisational rights 100% Entrenched in the Adopted from the Main Collective Main Collective Agreement(MCA) Agreement which expires in See HR Development May Skills Development 100% See HR Development 18 Smoking 100% Currently under review 19 Scarce Skills Not Applicable Not applicable Looking for best practices and to develop own 20 Work organisation Not Applicable Not applicable Looking for best practices and to develop own 4.3 INJURIES, SICKNESS AND SUSPENSIONS No incidents of injury on duty during the year under review. Number of days and cost of Sick Leave (excl Injuries on duty) Requested information from APPX) Category Total sick leave days Proportion of sick leave w/out medical certification Employees using sick leave 95 Total employees in post Average sick leave per employee Estimated cost Professionally qualified and 65 27, R162, experienced Semi-skilled and discretionary R259,049.06

96 decision Senior management R 11, Skilled technical and academically R336, qualified Top management R 0.00 Unskilled and defined decision making R 23, Requested info from APPX service provider but she advised that payroll needs to UG & Finance Interns make changes to the system to include the ug/interns as separate. Level 5 is incorrect Number and period of suspensions Nature of misconduct Date of suspension Details of disciplinary hearing Details of Disciplinary Action taken or Status of Case and Reasons why not Finalised Date Finalised Unauthorised use of Council vehicle May 2017 Hearing processes currently underway. Case is nearing its final stages NA 4.4 PERFORMANCE REWARDS Performance Awards by Gender Beneficiary Profile Designations Gender Total number of employees in group Number of beneficiaries Expenditure on rewards Year 1 Proportion of beneficiaries within group MM and S57 Female Male 4 1 R % Has the statutory municipal calculator been used as part of the evaluation process? Yes 96

97 COMMENT ON PERFORMANCE AWARDS Only one (1) of the three (3) qualifying people received performance rewards during the year under review. The one (1) section 57 manager was appointed during the financial year and was therefore not entitled to a performance bonus for the 2015/16 financial year. COMPONENT C: CAPACITATING THE MUNICIPAL WORKFORCE INTRODUCTION TO WORKFORCE CAPACITY DEVELOPMENT SBDM has a Skills Development Programme policy which ensures that all employees are trained through an annual approved Workplace Skills Plan. Individual profiles are drawn and skills and knowledge gaps are identified on an annual basis against Council broader objectives in order to train employees. A budget is set aside annually for training of employees in soft skills, full academic qualification, work related training etc; In addition SBDM has budgeted an amount of R to provide study assistance to employees who wish to study part time and improve their qualifications at various universities and colleges. Directors and Managers are sent on training programmes to enable them to obtain competency qualifications as prescribed by National Treasury. 97

98 4.5 SKILLS DEVELOPMENT AND TRAINING Skills Programs NO COURSE TOTAL NO BENEFITED 1 MFMP 8 2 Report Writing and minute taking 6 3 Supervisor Development Programme 10 4 IT Management 2 5 Local Government Certificate 2 6 Project management 6 7 Windows Server 2012 (MCSA) 1 8 Arc GIS for server 1 9 Records Management 3 10 GIS Certificate 3 11 Skills development training 3 FULL QUALIFICATION QUALIFICATION TOTAL NO BENEFITED INSTITUTION Bachelor Of Commerce 1 NNMU Accounting National Diploma Human 1 NMMU Resource Management National Diploma 1 NMMU Management PGDiploma Internal Audition 1 NMMU BCom Honours Tourism 1 NMMU Management Diploma Records 1 Southern Business School Management Bachelor of Business 1 Southern Business School Administration Diploma in management 1 Southern Business School BA Disaster & Safety 2 Lyceum College 98

99 Management Bachelor of Commerce Honours in Supply Chain Management 1 MANCOSA 99

100 SKILLS DEVELOPMENT AND RELATED EXPENDITURE AND ON THE FINANCIAL COMPETENCY REGULATIONS: Financial Competency Development: Progress report Description A. Total number of officials employed by municipality B. Total number of officials employed by municipal entities Consolidated : Total of A and B Consolidated competency assessments completed A and B Consolidated Total number of officials whose performance agreements comply with Regulation 16 (regulation Consolidated total number of officials that meet prescribed competency levels (Reg 14(4)(e4) 14(4)(f) Financial Officials Accounting officer CFO Senior managers Other Other Finance Supply Chain Management officials Heads of SCM Units SCM senior managers Total

101 COMPONENT D: MANAGING THE WORKFORCE EXPENDITURE 4.6 EMPLOYEE EXPENDITURE NUMBER OF EMPLOYEES WHO S SALARIES WERE INCREASED DUE TO THEIR POSITIONS BEING UPGRADED 0 EMPLOYEES WHOSE SALARY LEVELS ARE PERSONAL TO HOLDER FOLLOWING IMPLEMENTATION OF JOB EVALUATION 34 EMPLOYEES APPOINTED TO POSTS NOT APPROVED Nil DISCLOSURES OF FINANCIAL INTERESTS This information is contained in the financial statements. 101

102 CHAPTER 5 CHAPTER 5 FINANCIAL PERFORMANCE PLANNING AND BUDGETING The 2016/17 Medium-Term Revenue and Expenditure Framework (MTREF) was prepared in terms of the approved Integrated Development Plan and Budget process plan approved by Council. The 2016/17 MTREF was approved after stakeholder and community consultation by Council on 25 May ACCOUNTING AND REPORTING The municipality has the necessary financial-related policies approved by Council and these policies are reviewed annually. The implementation of the policies assists in ensuring compliance with the Standards of Generally Recognised Accounting Practices (GRAP). The annual financial statements are prepared internally in terms of GRAP. None of the GRAP standards which became effective during the financial year were applicable to the municipality. The annual financial statements were reviewed by management and internal audit before submission to the Audit Committee, for final review. The high standard of accounting and reporting practices by the municipality has attributed to the municipality achieving its 11 th consecutive Unqualified Audit Opinion from the Auditor-General. ASSET AND LIABILITY MANAGEMENT Assets The total assets of the municipality amounts to R285.3 million with the current assets amounting to R236.7 million and the non-current assets amounting to R48.6 million respectively. The current assets are mainly comprised of short-term investments and cash and cash equivalents and the non-current assets comprising of investment property, property, plant and equipment and heritage assets. The municipality had an approved budget for capital expenditure of R7.8 million for the financial year. An amount of R6.1 million was spent which equates to 78% of the approved budget. It is however important to note that the municipality does not have infrastructural assets. All capital assets implemented at the municipality as projects forms part of project expenditure and upon completion of the project, the asset is capitalized in the respective local municipalities accounting records. Liabilities The total liabilities of the municipality amounts to R98.0 million with the current portion amounting to R41.2 million and the long-term portion R56.8 million. The current portion is mainly comprised of payables from exchange transactions and the short-term portion of post-employment medical benefits. The payables from exchange transactions amount to R35.8 million. Of this amount, R23.4 million relates to the Municipal Infrastructure Grant that the municipality is administering on behalf of Makana Local Municipality. 102

103 The post-employment medical benefits have decreased R3.1 million year-on-year due to an actuarial gain incurred for the financial year. REVENUE AND EXPENDITURE MANAGEMENT Revenue The total revenue generated by the municipality for the financial year amounted to R115.4 million with 76% attributable to government grant and subsidies and 16% to interest income. The above results demonstrate the municipality s over-reliance on government grants and interest generated from cash investments. The limited increases in the government allocations through the Division of Revenue Act impacts negatively on the municipality s revenue base. Also, the use of accumulated surplus to fund the budget reduces the potential interest income generated on cash investments. The municipality received the following grants in accordance with the Division of Revenue Act: Unconditional grants Equitable Share R Levy Replacement Grant R The above grants were utilized in the operations of the municipality. Conditional grants Finance Management Grant R Expanded Public Works Programme Grant R Rural Roads Asset Management Systems Grant R All grants received through DORA the have been fully utilized in terms of the conditions of the grants and no application for rollovers where necessary. Regular reports were submitted to the relevant government departments as well as Nation Treasury. Expenditure The actual expenditure incurred amounts to R128.5 million for the financial year, which represents 77% spent of the 2016/17 adjusted budget. Employee costs including councilors remuneration represents 35% and project costs represents 20% of the total expenditure incurred. It should be noted that conditional grant expenditure has reduced by 66% year-on-year. This is as a result of the conditional grants held by the municipality depleting. 103

104 SUPPLY CHAIN MANAGEMENT The municipality has an approved Supply Chain Management Policy, which is being implemented effectively by the Supply Chain Management unit and officials. The internal control environment is strong and is improving continuously. The irregular expenditure has reduced to R1.25 million for the year with 88% of the irregular expenditure being awards made through the deviation process which were regarded as invalid in the prior year. During the audit, the Auditor-General raised a finding which resulted in an additional expenditure, which related to an award made to an employee in the service of the state. R irregular The municipality will be monitoring the current controls in place to ensure that incidents of non-compliance are reduced and prevented. OTHER FINANCIAL MANAGEMENT Indicator name Target set for the year Achievement level during the year Achievement percentage during the year 1 Percentage of expenditure on capital budget 2 Salary budget as a percentage of the total operational budget 3 Total municipal own revenue as a percentage of the total actual budget 4 Percentage of FMG budget appropriately spent 5 Percentage of EPWP budget appropriately spent 6 Total actual trade creditors as a percentage of total actual revenue 7 Rate of municipal consumer debt reduction 8 Percentage of MIG budget appropriately spent 9 Arrears in property rates and service charges R R 7.8 mil 6.1 mil 78% 35.5% 26.7% 75% 34.7% 5.3% 15% 1.25 mil 1.25 mil 100% 1.0 mil 1.0 mil 100% 7.3% There are no municipal consumer debtors as the municipality does not have consumers. Its primary debtors are Organs of State. The municipality does not receive its own MIG allocation. The municipality did however receive MIG on behalf of Makana Local Municipality The municipality does not levy property rates or service charges FINANCIAL INDICATORS 104

105 (Limitation = unable to obtain sufficient appropriate information) Percentage over-spending of the final approved operating expenditure budget Percentage under-spending of the final approved capital budget Percentage under-spending of conditional grants received AS AT 30 JUNE 2017 BUDGET MANAGEMENT Not over-spent GRANT MANAGEMENT AS AT 30 JUNE 2016 Not over-spent 22% 77% Not under-spent EXPENDITURE MANAGEMENT Not under-spent 3.1 Creditor-payment period 26 Days 26 Days Debtor-collection period (before impairment) Debtor-collection period (after impairment) Debtors impairment provision as a percentage of accounts receivable A deficit for the year was realised (total expenditure exceeded total revenue) A net current liability position was realised (total current liabilities exceeded total current assets) A net liability position was realised (total liabilities exceeded total assets) Percentage of PPE and/or intangible assets impaired Percentage of loan receivables (loans awarded) and/or investments impaired REVENUE MANAGEMENT No service debtors No service debtors ASSET AND LIABILITY MANAGEMENT No service debtors No service debtors 2.8% 19.9% Yes No No Yes No No (0.1%) (0.2%) 0% 0% 105

106 The year-end bank balance was in overdraft Net cash flows for the year from operating activities were negative Cash and cash equivalents as a percentage of operating expenditure Creditors as a percentage of cash and cash equivalents Percentage by which unspent conditional grants received exceeds cash available at year-end Current liabilities as a percentage of net cash inflows for the year from operating activities CASH MANAGEMENT No Yes No Yes 85.5% 76.6% 7.6 % 13.3 % Not exceeded N/A - Cash outflow during the year Not exceeded N/A - Cash outflow during the year 6.7 Long-term debt as a percentage of net cash inflows for the year from operating activities N/A - Cash outflow during the year N/A - Cash outflow during the year 6.8 Employee benefit obligation as a percentage of net cash inflows for the year from operating activities N/A - Cash outflow during the year N/A - Cash outflow during the year OVERSIGHT AND OPERATIONAL CONTINUITY The municipality prepares the required reports in terms of the Municipal Finance Management Act which include amongst other, the section 71 monthly report, section 52 quarterly report, section 72 mid-year report and the quarterly supply chain management report. The reports are submitted to Treasury, Sector Departments and the Auditor-General (where applicable). The above reports include all relevant information such as budget versus actual performance, reasons for variances, etc. These reports are submitted to the Audit Committee, Municipal Public Accounts Committee, Mayoral Committee and Council for monitoring and oversight. 106

107 CHAPTER 6 CHAPTER 6 AUDITOR GENERAL AUDIT FINDINGS COMPONENT A: 6.1 AUDITOR-GENERAL OPINION OF FINANCIAL STATEMENTS 2015/2016 Report of the Auditor-General to the Eastern Cape Provincial Legislature and the council on the Sarah Baartman District Municipality Report on the consolidated and separate financial statements Introduction 1. I have audited the consolidated and separate financial statements of the Sarah Baartman District Municipality and its municipal entity set out on pages.. to. ~., which comprise the statement of financial position as at 30 June 2016, the statement of financial performance, statement of changes in net assets, cash flow statement and appropriation statement for the year then ended, as well as the notes, comprising a summary of significant accounting policies and other explanatory information. Accounting officer's responsibility for the consolidated and separate financial statements 2. The accounting officer is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP) and the requirements of the Municipal Finance Management Act of South Africa, 2003 (Act No. 56 of 2003) (MFMA) and the Division of Revenue Act of South Africa, 2015 (Act No. 1 of 2015) (DORA), and for such internal control as the accounting officer determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. Auditor-generals responsibility 3. My responsibility is to express an opinion on these consolidated and separate financial statements based on my audit. i conducted my audit in accordance with international Standards on Auditing. Those standards require that I comply with ethical requirements, and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement. 4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated and separate financial statements. The 107

108 procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated and separate financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated and separate financial statements. 5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion 6. In my opinion, the consolidated and separate financial statements present fairly, in all material respects, the financial position of the Sarah Baartman District Municipality and its municipal entity as at 30 June 2016 and their financial performance and cash flows for the year then ended, in accordance with the SA Standards of GRAP and the requirements of the MFMA and DORA. Emphasis of matters 7. I draw attention to the matters below. My opinion is not modified in respect of these matters. Impairment loss 8. Receivables from exchange transactions disclosed in note 4 to the financial statements and receivables from non-exchange transactions disclosed in note 5 to the financial statements were impaired by R (2015: R ) and R1 million (2015: R9 million), respectively. Restatement of corresponding figures 9. As disclosed in note 28 to the financial statements, the corresponding figures for 30 June 2015 have been restated as a result of an error discovered by management during the financial year in the financial statements of the municipality at, and for the year ended, 30 June Irregular expenditure 10. As disclosed in note 42 to the financial statements, the municipality incurred irregular expenditure of Rl,4 million (2015: R3,3 million) during the year as a result of contravening supply chain management prescripts. The municipality did receive goods and services for these payments. 108

109 Additional matters 11. I draw attention to the matters below. My opinion is not modified in respect of these matters. Unaudited disclosure notes 12. In terms of section 125(2)(e) of the MFMA, the municipality is required to disclose particulars of non-compliance with the MFMA. This disclosure requirement did not form part of the audit of the financial statements and, accordingly, I do not express an opinion thereon. Unaudited supplementary schedules 13. The supplementary information set out on pages XX to XX does not form part of the financial statements and is presented as additional information. I have not audited these schedules and, accordingly, I do not express an opinion thereon~ Report on other legal and regulatory requirements 14. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof, I have a responsibility to report findings on the reported performance information against predetermined objectives of selected development priorities presented in the annual performance report, compliance with legislation and internal control. The objective of my tests was to identify reportable findings as described under each subheading but not to gather evidence to express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these matters. Predetermined objectives 15. I performed procedures to obtain evidence about the usefulness and reliability of the reported performance information of the following selected development priorities presented in the annual performance report of the municipality for the year ended 30 June 2016: Development priority 1: Infrastructure Investment on page xx to xx Development priority 3: Economic Development on page xx to xx Development priority 4: Community and Social Services on page xx to xx 16. I evaluated the usefulness of the reported performance information to determine whether it was presented in accordance with the National Treasury's annual reporting principles and whether the reported performance was consistent with the planned development priorities. I further performed tests to determine whether indicators and targets were well defined, verifiable, specific, measurable, time bound and relevant, as required by the National Treasury's Framework for Managing Programme Performance Information (FMPPI). 109

110 17. I assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete. 18. The material findings in respect of the selected development priorities are as follows: Development priority 1: infrastructure investment Usefulness of reported performance information 19. The FMPPI requires performance targets to be specific in clearly identifying the nature and required level of performance as well as to be measurable. A total of 25% of the targets were not measurable and not well defined. This was due to inadequate planning by the municipality, as they did not have processes in place to ensure that they receive inputs on time from the local municipalities to facilitate better planning. Reliability of reported performance information 20. I did not raise any material findings on the reliability of the reported performance information. Development priority 3: Economic Development Usefulness of reported performance information 21. The FMPPI requires performance targets to be specific in clearly identifying the nature and required level of performance as well as to be measurable~ A total of 33o/o of the targets were not measurable and not well defined. This was due to inadequate planning by the municipality, as they did not have processes in place to ensure that they receive inputs on time from the local municipalities to facilitate better planning. Reliability of reported performance information 22. I did not raise any material findings on the reliability of the reported performance information. Development priority 4: Community and Social Services 23. I did not raise any material findings on the usefulness and reliability of the reported performance information. Additional matters 24. I draw attention to the following matters: Achievement of planned targets 110

111 25. Refer to the annual performance report on pages xx to xx for information on the achievement of planned targets for the year. This information should be considered in the context of the material findings on the usefulness of the reported performance information in paragraphs 19 and 21 of this report. Adjustment of material misstatements 26. I identified material misstatements in the annual performance report submitted for auditing on the reported performance information of development priority 1: infrastructure investment, development priority 3: economic development, and development priority 4: community and social services. As management subsequently corrected the misstatements, I did not raise any material findings on the reliability of the reported performance information. Compliance with legislation 27. I performed procedures to obtain evidence that the municipality had complied with applicable legislation regarding financial matters, financial management and other related matters. My material finding on compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA, is as follows: Expenditure management 28. Reasonable steps were not taken to prevent irregular expenditure, as required by section 62(1)(d) of the MFMA. Internal control 29. I considered internal control relevant to my audit of the financial statements, annual performance report and compliance with legislation. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on the annual performance report and the findings on compliance with legislation included in this report. Leadership 30. The leadership did not exercise oversight responsibility regarding performance reporting and compliance, as material findings were raised on performance information and compliance with legislation. The leadership did not adequately review the annual performance report, as material misstatements were identified. These were subsequently corrected. Financial and performance management 31. The monitoring and evaluation unit did not ensure that all of the planned targets in the service delivery and budget implementation plan were specific, measurable and well defined, due to inadequate planning. As a result, not all inputs had been considered during the planning phase. 111

112 32. Management did not adequately monitor internal controls to prevent irregular expenditure throughout the financial year. Management did also not ensure that supply chain management prescripts were adhered to. Other AUOtTOR-GENERAL SOUTH AFRICA Auditing to build public confidence reports 33. I draw attention to the following engagement that could potentially have an impact on the municipality s financial, performance and compliance-related matters. My opinion is not modified in respect of this engagement that is in progress. Investigations 34. An organ of the state is performing investigations at the request of the municipality. These investigations relates to an alleged payments by the municipality in the incorrect suppliers bank account, destruction of a property by employees from unprotected strike and a translation service which was provided by employees close family member to the municipality. These investigations are still ongoing. 112

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114 AUDITOR-GENERAL REPORT 2016/2017 COMPONENT B: 6.2 AUDITOR-GENERAL OPINION OF FINANCIAL STATEMENTS 2016/2017 Report of the Auditor-General to the Eastern Cape Provincial Legislature and the council on the Sarah Baartman District Municipality For the year ended 30 June 2017 Report of the auditor-general to the Eastern Cape Provincial Legislature and the council on: Sarah Baartman District Municipality Report on the audit of the consolidated and separate financial statements Introduction 1. I have audited the consolidated and separate financial statements of the Sarah Baartman District Municipality and its municipal entity set out on pages. ~. to..., which comprise the consolidated and separate statement of financial position as at 30 June 2017, the consolidated and separate statement of financial performance, statement of changes In net assets, cash flow statement and statement of comparison of budget and actual amounts for the year then ended, as well as the notes to the consolidated financial statements, Including a summary of significant accounting policies. 2. In my opinion, the consolidated financial statements present fairly, in all material respects, the consolidated and separate 6nanclal position of the Sarah Baartman District Municipality as at 30 June 2017, and their financial performance and cash flows for the year then ended in accordance with the South African Standards of Generally Recognlsed Accounting Practice (SA Standards of GRAP) and the requirements of the Municipal Finance Management Act of South Africa, 2003 (Act No. 56 of 2003) (MFMA) and the Division of Revenue Act of South Africa, 2016 (Act No. 3 of 2016) (DORA). Basis for opinion 3. I conducted my audit in accordance with the International Standards on Auditing (lsas). My responsibilities under those standards are further described in the Auditor General s responsibilities for the audit of the consolidated and separate financial statements section of my report. 4. I am independent of the municipality in accordance with the International Ethics Standards Board for Accountants' Code of ethics for professional accountants (\ESSA code) together with the ethical requirements that are relevant to my audit In South Africa. 114

115 I have fulfilled my other ethical responsibilities In accordance with these requirements and the IESBA code. 5. I believe that the audit evidence I have obtained Is sufficient and appropriate to provide a basis for my opinion. Emphasis of matters 6. I draw attention to the matters below. My opinion is not modified In respect of these matters. Restatement of corresponding figures 7. As disclosed in note 28 to the financial statements, the corresponding figures for 30 June 2016 have been restated as a result of changes in the accounting policy and an error in the financial statements of the municipality at, and for the year ended, 30 June Irregular expenditure 8. As disclosed in note 42 to the financial statements, irregular expenditure of R incurred in previous years was still under investigation. Other matters 9. I draw attention to the matters below. My opinion is not modified in respect of these matters. Unaudited disclosure notes 10. In terms of section 125(2)(e) of the MFMA, the municipality is required to disclose particulars on non-compliance with the MFMA. This disclosure requirement did not form part of the audit of the financial statements and, accordingly, I do not express an opinion thereon. Unaudited supplementary schedules 11. The supplementary information set out on pages XX to XX does not form part of the financial statements and is presented as additional information. I have not audited these schedules and, accordingly, I do express an opinion thereon. Responsibilities of the accounting officer for the consolidated and separate financial statements 115

116 12. The accounting officer is responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with the Standards of GRAP and the requirements of the MFMA and DORA, and for such internal control as the accounting officer determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. 13. In preparing the consolidated and separate financial statements, the accounting officer is responsible for assessing the municipality's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the accounting officer either intends to liquidate the municipality or to cease operations, or has no realistic alternative but to do so. Auditor-general responsibilities for the audit of the consolidated and separate financial statements 14. My objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is high level assurance, but is not a guarantee that an audit conducted in accordance with the ISA s will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements. 15. A further description of my responsibilities for the audit of the consolidated and separate financial statements is included in the annexure to the auditor's report. Report on the audit of the annual performance report Introduction and scope 16. In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general notice issued in terms thereof, 1 have a responsibility to report material findings on the reported performance information against predetermined objectives for selected development priorities presented in the annual performance report. 1 performed procedures to identify findings but not to gather evidence to express assurance. 17. My procedures address the reported performance information, which must be based on the approved performance planning documents of the municipality. I have not evaluated the completeness and appropriateness of the performance indicators/measures included in the planning documents. My procedures also did not extend to any disclosures or assertions relating to planned performance strategies and information in respect of future periods that may be included as part of the reported performance information. 116

117 Accordingly, my findings do not extend to these matters. 18. I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, as defined in the general notice, for the following selected development priorities presented in the annual performance report of the municipality for the year ended 30 June 2017: 19. I performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete. 19. I did not raise any material findings on the usefulness and reliability of the reported performance information for the following development priorities: Development priority 1: Infrastructure Investment on page xx to xx Development priority 3: Economic Development on page xx to xx Development priority 4: Community and Social Services on page xx to xx Development priorities Development priority 1 - Infrastructure Investment Development priority 3 - Economic Development Pages in the annual performance report x-x x-x Development priority 4 - Community and Social Services x-x Other matters 21. I draw attention to the matter below. Achievement of planned targets 22. Refer to the annual performance report on pages xx to xx for information on the achievement of planned targets for the year and explanations provided for the underachievement of a significant number of targets. Introduction and scope 23. In accordance with the PAA and the general notice issued in terms thereof, I have a responsibility to report material findings on the compliance of the municipality with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance. 117

118 24. The material findings on compliance with specific matters in key legislation are as follows: Annual financial statements 25. The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 122 of the MFMA. 26. Material misstatements of operating leases identified by the auditors in the submitted financial statement were subsequently corrected and the supporting records were provided subsequently, resulting in the financial statements receiving an unqualified audit opinion. Human resource management 27. The senior manager did not sign performance agreements within the prescribed period, as required by section 57(2)(a) of the Municipal Systems Act of South Africa, 2000 (Act No. 32 of 2000). Expenditure management 28. I could not obtain sufficient appropriate audit evidence that money owed by the municipality had always been paid within 30 days of receiving the relevant invoice or statement, as required by section 65(2)(e) of the MFMA. Other information 29. The municipality's accounting officer is responsible for the other information. The other information comprises the information included in the annual report, which includes the mayor s foreword and executive summary, governance, service delivery performance, organisational development performance, Auditor-General s findings and appendices (including recommendations by the municipal audit committee), as required by section 121(3) and (4) of the MFMA. The other information does not include the separate financial statements, the auditor's report and those selected development priorities presented in the annual performance report that have been specifically reported in the auditor's report. 30. My opinion on the financial statements and findings on the reported performance information and compliance with legislation do not cover the other information and I do not express an audit opinion or any form of assurance conclusion thereon. 31. In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the separate financial statements and the selected development priorities presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears 118

119 to be materially misstated. If, based on the work I have performed on the other information obtained prior to the date of this auditor's report, I conclude that there Is a material misstatement of this other information, I am required to report that fact. 32. I did not receive the other information prior to the date of this auditor's report. When I do receive and read this information, and if I conclude that it contains any material misstatements, I am required to communicate the matter to those charged with governance and request that the other information be corrected. If the other information is not corrected, I may have to retract this auditor's report and re-issue an amended report as appropriate. If it is corrected however, this will not be necessary. Internal control deficiencies 33. I considered internal control relevant to my audit of the consolidated and separate financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to express any form of assurance thereon. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on compliance with legislation included in this report. Leadership 34. Leadership did not in all instances exercise oversight responsibility regarding performance reporting and compliance, as I raised material findings on compliance with relevant legislation. Financial and performance management 35. Instances were identified where management did not adequately monitor internal controls to prevent non-compliance. In the areas of the annual financial statements, expenditure management, supply chain management and human resource management. East London 13 December

120 6.3 RESPONSE TO THE AUDIT REPORT ON THE FINANCIAL STATEMENTS AND PERFORMANCE INFORMATION FOR THE YEAR ENDED 30 JUNE 2017 In accordance with the Public Audit Act, Council has to consider the Audit Report within one month after its first sitting after the audit report has been submitted by the Auditor General. Council has received an unqualified audit report and the Auditor-General has certified that the Consolidated and Separated Financial Statements present fairly, in all material respects, the financial position of the Sarah Baartman District Municipality as at 30 June 2017 and their financial performance and cash flows for the year in accordance with GRAP and the requirements of the MFMA and DORA. 1. EMPHASIS OF MATTER The Auditor General has under the heading Emphasis of Matter raised a number of issues without modifying the audit opinion. Restatement of corresponding figures As disclosed in note 28 to the financial statements, the corresponding figures for 30 June 2016 have been restated as a result of changes in the accounting policy and an error in the financial statements of the municipality at, and for the year ended, 30 June The municipality does not foresee any major changes to the accounting policies in the financial year. Also, any errors identified will be assessed on its value and nature to determine whether it requires a restatement of the opening balances. These transactions unfortunately are unavoidable to ensure that the information presented in comparable. Irregular expenditure As disclosed in note 42 to the financial statements, irregular expenditure of R incurred in previous years was still under investigation. The Council has subsequently resolved on the irregular expenditure in accordance with section 32 of the MFMA. It must be noted that goods and services were received for the irregular expenditure incurred. 2. REPORT ON THE AUDIT OF THE ANNUAL PERFORMANCE REPORT The Auditor-General evaluated the usefulness and reliability of the reported performance information in accordance with the criteria developed from the performance management and reporting framework, for the following selected development priorities presented in the annual performance report of the municipality for the year ended 30 June 2017: Development priority 1 infrastructure investment Development priority 3 economic development Development priority 4 community and social services The Auditor-General performed procedures to determine whether the reported performance information was properly presented and whether performance was consistent with the approved performance planning documents. The Auditor-General performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed the reliability of the reported performance information to determine whether it was valid, accurate and complete. 120

121 The Auditor-General did not raise any material findings on the usefulness and reliability of the reported performance information. Achievement of planned targets Refer to the annual performance report for information on the achievement of planned targets for the year and explanations provided for the underachievement of a significant number of targets. The Accounting Officer will enhance the monitoring of the Service Delivery Budget Implementation Plan to ensure that the achievements of targets are realized. 3. REPORT ON THE AUDIT OF COMPLIANCE WITH LEGISLATION The Auditor-General have a responsibility to report material findings on the compliance of the municipality on specific matters in key legislation. The material findings on compliance with specific matters in key legislation were as follows: Annual financial statement The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 122 of the MFMA. Material misstatements of operating leases identified by the auditors in the submitted financial statements were subsequently corrected and the supporting records were provided subsequently, resulting in the financial statements receiving an unqualified audit opinion. Human resource management The senior manager did not sign performance agreement within the prescribed period, as required by section 57(2)(a) of the Municipal Systems Act of South Africa, 2000 (Act No. 32 of 2000). The performance agreement was signed after the specified required timeframe. The Accounting Officer will ensure that the performance agreements of the senior manager and the senior managers to be appointed are signed within the prescribed timeframes. Expenditure management I could not obtain sufficient appropriate audit evidence that money owed by the municipality had always been paid within 30 days of receiving the relevant invoice or statement, as required by section 65(2) of the MFMA. Management will ensure that all invoices are stamped date received to ensure that the Auditor-General can perform their audit procedures to verify the period in which payments are made to suppliers. 121

122 4. INTERNAL CONTROL The Auditor-General considered internal control relevant to my audit of the financial statements, annual performance report and compliance with legislation. The matters reported below are limited to the significant internal control deficiencies that resulted in the findings on the annual performance report and the findings on compliance with legislation included in this report. Leadership The leadership did not exercise oversight responsibility regarding performance reporting and compliance, as material findings were raised on compliance with legislation. The Audit Committee has requested the Internal Auditors to include a Compliance Review in the Internal Audit Plan for the following financial year to ensure that all key compliance matters are adhered to. Financial and performance management Instances were identified where management did not adequately monitor internal controls to prevent noncompliance in the areas of the annual financial statements, expenditure management, supply chain management and human resource management. An audit action plan was developed which included all the findings reported in the Management Report issued by the Auditor-General. This action plan will be monitored continuously by Management and the Audit Committee to ensure that all findings raised are addressed and that the internal controls are improved accordingly 122

123 APPENDIX A COUNCILLORS; COMMITTEE ALLOCATION AND COUNCIL ATTENDANCE NOTE: This list incorporated Councillors served after Local Government Elections that had taken place on 03 August 2016 and they took oath / affirmation on 24 August 2016 The previous meeting as the first meeting of this financial year was held on 06 July 2016 Council members Councillors, Committees allocated and Council attendance Full time/part Committees allocated Local time Municipality/ FT/PT Party represented Mayoral Committee, Rules Committee, Remuneration Committee, Relocation Task Team 123 % Council Meetings attended Pieters NN (Ms) FT Rules Committee, ANC 100% N/A Kekana KE (Ms) FT Mayoral Committee, Rules ANC 100% N/A Committee Bezuidenhout DJ PT Dr Beyers Naudé 100% N/A Mboneni A PT Dr Beyers Naudé 100% N/A Seekoei BW PT Dr Beyers Naudé 100% N/A Grootboom TA PT MPAC Blue Crane Route 100% N/A Camealio-Benjamin VA PT MPAC Kouga 100% N/A (Ms) Dayimani M PT MPAC Kouga 100% N/A Dhludhlu B PT Kouga 100% N/A Hendricks PT MPAC Kouga 86% 0% Yake F PT Koukamma 100% N/A Nase L PT MPAC Makana 86% 0% Seyisi T (Ms) PT Makana 86% 0% Sodladla S PT Makana 86% 0% Madyo XG PT Ndlambe 100% N/A Mateti M (Ms) PT MPAC Ndlambe 86% 14% Xhasa NE (Ms) PT Ndlambe 86% 0% % apologies for nonattendance Cannon GG (Mrs) PT Ndlambe 86% Deceased Blou PR (Ms) PT MPAC Sundays River 71% 29% Valley Smith K (Ms) PT Sunday s River Valley 71% 29% Councillors, Committees allocated and Council attendance Council Committees allocated members Full time/part time FT/PT Local Municipality / Party represented % Meetings attended Lucas S FT Mayoral Committee, ANC 86% 14% Ncamiso (Mrs) KC FT ANC 100% N/A % apologies for nonattendance

124 O Connel NJ FT Mayoral Committee, ANC 86% 14% Peter ZJ FT Mayoral Committee, Remuneration Committee, Local Labour Forum, Relocation Task Team ANC 100% N/A Stuurman VS FT Mayoral Committee, Rules Committee, ANC 86% 0% Remuneration Committee, Local Labour Forum, Relocation Task Team Britz JHP PT Remuneration Committee, DWIF DA 100% N/A Gailey RMJ PT DWIF DA 71% 29% Katoo TW PT MPAC, DWIF DA 100% N/A Reynolds LM PT MPAC, Rules Committee, DWIF DA 86% 14% Van Niekerk ML PT DWIF DA 86% 14% NOTE: The District Municipality only has a Mayoral Committee. There are no Portfolio Committees. Councillors of the District Municipality serve on District Intergovernmental Forums which include DWIF, District Aids Council, District Health Council etc. These forums meet quarterly and make recommendations to the Mayoral Committee. Some councillors are also serving on various forums and sub-committees set up by Council for special purposes. Details of these committees and forums are contained in Appendix B 124

125 APPENDIX B COMMITTEES AND COMMITTEE PURPOSES Committees (other than Mayoral Committee) and Purposes of Committees Municipal Committees Purpose of committee Municipal Public Accounts Committee Oversight over Executive function Audit Committee Oversight of financial reporting and disclosure, review of the work of Internal Audit, the Risk Management System and Performance Management System District Health Council Oversees all matters pertaining to Primary Health Care and related health functions in the District, eg EMS Local Labour Forum Consultation between the employer and employee bodies on all labour relations and HR issues District Aids Council Programmes and policies that pertain to combatting the scourge of HIV and Aids District Wide Infrastructure Forum Intergovernmental Forum which deals with integrated infrastructure development in the District Budget Steering Committee Assists the Executive Mayor to perform her responsibility in terms of section 53 of the MFMA with regard to budget processes and related matters Training Committee Training and development of employees Remuneration Committee Advise Council on remuneration matters that affect section 54A and 56 managers Anti-corruption and Fraud Prevention Committee Develop and review policies and strategies to improve internal control to prevent undesirable practise and to mitigate risks to the institution Relocation Committee Relocation of the District Head Office to Kirkwood Rules Committee Review the Rules and Orders of Council 125

126 APPENDIX C THIRD TIER ADMINISTRATIVE STRUCTURE Directorate Finance and Corporate Services Finance and Corporate Services Finance and Corporate Services Economic Development Economic Development Office of the Municipal Manager Office of the Municipal Manager Infrastructure and Planning Infrastructure and Planning Infrastructure and Planning Infrastructure and Planning Infrastructure and Planning Infrastructure and Planning Third Tier Structure Manager (state title and name) R Lorgat (Manager : Finance) Z Stuurman (Manager : Corporate Services) F Antony (Legal Officer) D Magxwalisa (Project Manager : LED) T Mgudlwa (Project Manager : Tourism) U Daniels (Manager : Capacity Building) G Terblanche (Senior PMS Officer) M Maqokolo (Town Planner) P Snyman (Water Services Engineer) T Betha (PMU Manager) B Nthutu (Development Planner) M Nohashe (Head : Disaster Management) K Makgoka (Manager : Environmental Health Services) 126

127 APPENDIX D FUNCTIONS OF MUNICIPALITY / ENTITY MUNICIPAL FUNCTIONS Constitution Schedule 4 Part B functions Municipal / Entity Functions Function applicable to municipality (Yes / No) Air pollution Yes part of Municipal No Health Building regulations No No Child care facilities No No Electricity and gas reticulation No No Firefighting services Yes No Local tourism No - No District tourism Municipal airports No No Municipal planning Yes limited to No assistance to local municipalities Municipal health services Yes No Municipal public transport No No Municipal public works only in respect of the needs of municipalities in the discharge of their responsibilities to administer functions specifically assigned to them under the Constitution or any other law No but carries out certain infrastructure projects in local municipality areas Function applicable to entity (Yes / No) No 127

128 Municipal / Entity Functions MUNICIPAL FUNCTIONS Function applicable to municipality (Yes / No) Function applicable to entity (Yes / No) Constitution Schedule 4 Part B functions Pontoons, ferries, jetties, piers and harbours, No No excluding the regulation of international and national shipping and matters related thereto Stormwater management systems in built-up No No areas Trading regulations No No Water and sanitation services limited to potable water supply systems and domestic waste-water and sewage disposal systems No No 128

129 MUNICIPAL FUNCTIONS Constitution Schedule 4 Part B functions Municipal / Entity Functions Function applicable to municipality (Yes / No) Beaches and amusement facilities No No Billboards and the display of advertisements in public places Cemeteries, funeral parlours and crematoria No No Cleansing No No Control of public nuisances No No Control of undertakings that sell liquor to the public Facilities for the accommodation, care and burial of animals Fencing and fences No No Licensing of dogs No No Licensing and control of undertakings that sell No but carries out Health No food to the public Inspections as part of the EHS function Local amenities No No Local sport facilities No No Markets No No Municipal abattoirs No No Municipal parks and recreation No No Municipal roads No No Noise pollution Yes part of Municipal No Health Pounds No No No No No Function applicable to entity (Yes / No) No No No 129

130 Municipal / Entity Functions MUNICIPAL FUNCTIONS Function applicable to municipality (Yes / No) Function applicable to entity (Yes / No) Constitution Schedule 4 Part B functions Public places No No Refuse removal, refuse dumps and solid waste No No disposal Street Trading No No Street lighting No No Traffic and parking No No 130

131 APPENDIX E WARD REPORTING Not applicable 131

132 APPENDIX F WARD INFORMATION Not applicable 132

133 APPENDIX G RECOMMENDATIONS OF THE MUNICIPAL AUDIT COMMITTEE 2016/2017 AND REPORT BY THE AUDIT COMMITTEE Municipal Audit Committee recommendations Date of meeting Committee recommendations Recommendations adopted (enter Yes) If not adopted, provide explanation 18 August 2016 (a) Circulate possible date with duration of training to all Audit Committee members, Yes CDA and local municipalities in advance including (b) Appoint Management Officer Fleet Yes (c) Submit report on Relocation to the next meeting (d) Submit progress report on the merger of the three municipalities to the next meeting (e) Submit report on ICT governance framework to Mayoral Committee (f) Table a report to Council for consideration on Disaster Risk assessments and reviews. Yes Yes Yes Yes (g) Develop a plan that is riskbased. (h) Submit a progress report on the Status of the appointment / extension of Audit committee members 17 November 2016 (a) Submit an updated report on disposal of assets 19 January 2017 (a) Engage the Executive Mayor to seek further clarity on the delay in filling of senior positions Yes Yes Yes Yes 23 March 2017 No recommendations Not applicable 133

134 01 June 2017 a) Arrange a special meeting before the next scheduled meeting to deal with ICT. Yes 134

135 REPORT OF THE AUDIT COMMITTEE FOR THE YEAR ENDED 30 JUNE 2017 PURPOSE The Audit Committee serves as an independent advisory body which advises the municipal council, the political office-bearers, the accounting officer and the management staff of the municipality on matters relating to: Internal financial control and the internal audit function Risk management Accounting policies The adequacy, reliability and accuracy of financial reporting and information Performance management and evaluation Effective governance Compliance with the Municipal Finance Management Act 56 of 2003, the annual Division of Revenue Act and any other applicable legislation; Performance evaluation; and Any issues referred to it by the municipality. In addition, the Audit Committee reviews the annual financial statements to provide the council of the municipality with an authoritative and credible view of the financial position of the municipality, its efficiency and effectiveness and its overall level of compliance with the Municipal Finance Management Act 56 of 2003, the annual Division of Revenue Act and any other applicable legislation. The Committee further is required to respond to the council on issues raised by the Auditor-General in the audit report and initiates and oversees such investigations into the financial affairs of the municipality as the council may request. We have pleasure in presenting our report for the year ended 30 June TERMS OF REFERENCE The Audit Committee has adopted appropriate formal terms of reference that have been approved by the council and mayoral committee, and has executed its duties during the past financial year in accordance with these terms of reference and the relevant legislative requirements. COMPOSITION The Audit Committee comprises of four independent, outside members and meets at least four times per annum as per its approved terms of reference, although additional special meetings may be called as the need arises. During the 2016/2017 financial year five meetings were held. Name of Member Qualifications 135

136 Prof F E Prinsloo (Chairperson) 18 August Novembe r January March 2017 MCom (Accounting) CA (SA) 01 June 2017 Mr S G Zamisa (Contract ended) MBA Prof A Singleton (Contract ended) MCom CA (SA) (Taxation) Mr M Veeren Ms M Wait (Appointed on) Ms F Kobo (Appointed on) B.Compt CFA B. Comm Hons, Advanced Certificate in Auditing MBA, Btech - Labour Relations, ND: Human Resources, Post Graduate Certificate In Compliance Management, Certificate In Pratical Labour Law The Audit Committee was also represented at the Risk Assessment Workshop as well as the Performance Reviews of the Municipal Manager and the Directors (Senior Managers directly accountable to the Municipal Manager). The Municipal Manager, the Director: Finance and Corporate Services, Directors of Infrastructure Services and Economic Development respectively, and representatives from the external and internal auditors attend the Committee meetings according to a quarterly schedule of meetings. AUDIT COMMITTEE RESPONSIBILITIES The Committee reports that it has complied, as far as possible, with its responsibilities set out in its council approved terms of reference and the relevant legislative requirements. REVIEW OF THE ANNUAL FINANCIAL STATEMENTS The Audit Committee has: Reviewed the audited annual financial statements; Reviewed management responses to the management report of the Auditor-General; and Concluded that the going concern premise is appropriate in preparing the annual financial statements. 136

137 The Audit Committee has noted the unqualified opinion expressed by the Auditor-General in his report on the Annual Financial Statements, and that this is the eleventh year in a row that municipality has achieved such an opinion. The Audit Committee further noted that the financial statements presented to the Auditor-General for auditing included a material misstatement relating to disclosure of leases. This was subsequently corrected. The finding around reasonable steps not being taken to prevent irregular expenditure, as required by section 62(1)(d) of the Municipal Financial Management Act, thereby giving rise to non-compliance with legislation, is also noted. In the 2017/2018 financial year the oversight of the supply-chain management process, including management s responses to prevent a recurrence of irregular expenditure, will remain a key focus area of the Audit Committee, and the internal audit function. The other matters raised in the balance of the report, as well as in the related management report, have been noted by the Committee, as have the measures identified by management to address these. During the 2017/2018 financial year, the Audit Committee will monitor progress with the implementation of these remedial measures. EFFICIENCY AND EFFECTIVENESS OF INTERNAL CONTROLS The matters reported in the reports of Internal Audit (received quarterly) and the Auditor-General; as well as matters brought to the attention of the Accounting Officer, by way of informal queries and management letters, indicate that whilst there is always room for improvement, the internal checking and control measures generally functioned adequately during the year under review. EFFECTIVENESS OF INTERNAL AUDIT FUNCTION The Internal Audit Function is outsourced and the Audit Committee is satisfied that the internal audit function is operating effectively and that it has addressed the risks pertinent to the municipality and accomplished its annual operational plan. The Audit Committee is of the view that the unit was effective as it was able to discharge its responsibilities as set out in the approved audit plan and section 165 of the Municipal Finance Management Act. The Audit Committee received Internal Audit reports and scrutinised them for significant internal control deficiencies. The Audit Committee has had constructive engagements with Management on the findings reported by Internal Audit as well as Management responses provided. Management has been informed that the findings raised are an indication of control weaknesses that need to be strengthened for ensuring sound control environment. THE ACTIVITIES OF INTERNAL AUDIT FUNCTION The internal audit plan for the year ending June 2017 was approved by the Audit Committee. Discussions with the External Auditors (AGSA) took place during the preparation of the plan. The annual internal audit plan included the following: Mandatory Reviews - Supply Chain Review - Performance Review - Annual Financial Statements High Level Review - Compliance Review Risk based reviews - Human Resource Management Review - Information Technology Review - Asset Management Review - Follow up Review - Risk register validation 137

138 PERFORMANCE MEASUREMENT The municipality is monitoring and comparing actual to targeted progress on a regular basis according to a framework. The Service Delivery and Budget Implementation Plan (SDBIP) report is used which reflects planned completion dates for all projects. The Committee has confirmed with management that the SDBIP is discussed at every Mayoral Committee meeting as part of the monitoring of the achievement of targets. In addition, reporting and monitoring is taking place as expected and progress on performance management is discussed at each audit committee meeting. Performance Measurement is a standing item on the Committee s agenda. The conclusion by the Auditor-General that the reported performance information for the selected development priorities is useful and reliable, in all material respects, is noted. The importance of the formulation of SMART performance targets is fully understood by the Audit Committee, and our engagements with management at meetings during the 2017/18 financial year will focus, among others, on ensuring that the targets, set are measurable and welldefined. CONCLUSION The Audit Committee accepts the conclusions of the Auditor-General on the annual financial statements for the year ended 30 June 2017 and recommends that the audited annual financial statements should be adopted by the council. APPRECIATION On behalf of the Audit Committee, I would like to extend sincere appreciation to the municipal staff for their assistance and support during the financial year under review. P G Zitumane Chairman 17 January 2018 Glossary: GRAP Generally Recognised Accounting Practice PAA Public Audit Act, 2004 (Act 25 of 2004) 138

139 APPENDIX H LONG TERM CONTRACTS AND PUBLIC PRIVATE PARTNERSHIPS Long Term Contracts (largest contracts entered into during 2016/2017) Name of service provider Description of services rendered Start date of contract Expiry date of Contract Project Manager Impumelelo APPX financial 1 July June 2016 Manager : Computers (Pty) Ltd system support Finance Contract Value R Rennies Travel Travel agency services 10 December December 2016 Manager : Finance Note 1 Ultimate Recruitment Solutions Advertising agency services 9 February December 2017 Manager: Corporate Services Note 1 Rakoma and Associates Internal audit services 1 July June 2017 Manager : Finance Note 1 A2A Kapano and Ernest & Young Implementation of GRAP financial statements and improving audit outcomes at local municipalities 1 July June 2017 Director: Finance and Corporate Services Note 1 ABSA Bank Banking services 1 July June 2020 Manager : Finance Note 1 Engineering Advice and Services Road Asset Management System for three year period 1 July June 2016 Manager : PMU R ,00 Note 1 The contract value is dependent on the required usage by the municipality, but is limited to the amount budgeted and approved by the Council. Public Private Partnerships entered into during 2016/2017 Nil 139

140 APPENDIX I MUNICIPAL ENTITY/ SERVICE PROVIDER PERFORMANCE SCHEDULE The District Municipality has a Development Agency known as the Cacadu District Development Agency (CDDA). The relationship is guided by a Service Level Agreement. The focus is on economic development. Their processes and procedures of the Agency are very similar to that of the District Municipality, but the Agency has its own Board which drives their operations. The financial statements contained in this annual report are the consolidated Financial Statements of the Municipality as well as the Agency. An overview of the performance of the CDDA is contained in the following schedule. 140

141 141

142 142

143 143

144 144

145 145