Annual Report 2016/2017 Financial Year

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3 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS PROVINCE OF GAUTENG VOTE NO. 07 Annual Report 2016/2017 Financial Year PR115/2017 ISBN: Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017 3

4 TABLE OF CONTENTS PART A: GENERAL INFORMATION 6 1. DEPARTMENT GENERAL INFORMATION 6 2. LIST OF ABBREVIATIONS/ACRONYMS 8 3. FOREWORD BY THE MEC REPORT OF THE ACCOUNTING OFFICER STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT STRATEGIC OVERVIEW LEGISLATIVE AND OTHER MANDATES ORGANISATIONAL STRUCTURE ENTITIES REPORTING TO THE MEC 27 PART B: PERFORMANCE INFORMATION OVERVIEW OF DEPARTMENTAL PERFORMANCE STRATEGIC OUTCOME ORIENTED GOALS PERFORMANCE INFORMATION BY PROGRAMME TRANSFER PAYMENTS 68 4 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

5 PART C: GOVERNANCE INTRODUCTION RISK MANAGEMENT FRAUD AND CORRUPTION MINIMISING CONFLICT OF INTEREST CODE OF CONDUCT HEALTH SAFETY AND ENVIRONMENTAL ISSUES PORTFOLIO COMMITTEES SCOPA RESOLUTIONS PRIOR MODIFICATIONS TO AUDIT REPORTS INTERNAL CONTROL UNIT INTERNAL AUDIT AND AUDIT COMMITTEES 78 PART D: HUMAN RESOURCE MANAGEMENT INTRODUCTION OVERVIEW OF HUMAN RESOURCES HUMAN RESOURCES OVERSIGHT STATISTICS 85 PART E: FINANCIAL INFORMATION 116 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017 5

6 PART A GENERAL INFORMATION 6 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

7 1. DEPARTMENT GENERAL INFORMATION PHYSICAL ADDRESS: POSTAL ADDRESS: 37 Pixley Ka Isaka Seme Street Johannesburg 2001 Private Bag X86 Marshalltown 2107 TELEPHONE NUMBER/S: FAX NUMBER: ADDRESS: WEBSITE ADDRESS: SOCIAL MEDIA: PR115/2017 ISBN: Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017 7

8 2. LIST OF ABBREVIATIONS/ACRONYMS ABLTC ANSTC AFS APR BOL CDWs CDWP CFO COJ CONTRALESA DCOG DED DORA DRC EIA EPWP EXCO GCR GCRO GDF GDP GEYODI GPG GRAP GPG GRAP GSF HR ICT IGR IDP IGSDF IQMS JOC KPI AmaNdebele ba Lebelo Traditional Council AmaNdebele Nzunza Sokhulumi Traditional Council Annual Financial Statements Annual Performance Report Bank of Lisbon Community Development Workers Community Development Workers Programme Chief Financial Official City of Johannesburg Congress of Traditional Leaders of South Africa Department of Co-operative Governance Department of Economic Development Division of Revenue Act Democratic Republic of the Congo Environmental Impact Assessment Expanded Public Works Programme Executive Council Global City Region Gauteng City Region Observatory Gauteng Department of Finance Gross Domestic Product Gender, Youth and People with Disabilities Gauteng Provincial Government Generally Recognised Accounting Practices Gauteng Provincial Government Generally Recognised Accounting Practices Gauteng Speaker s Forum Human Resources Information Communication Technology Inter-governmental Relations Integrated Development Plans Intergovernmental Service Delivery Forums Integrated Quality Management System Joint Organising Committee Key Performance Indicator 8 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

9 LED LG LGAC-AAT LGTAS LM MDB MEC MFI MFMA MI MIG MISA MPAC MPRA MSA MTEF NBCR NSDP NYS OPCA OPCA PCC OPEX OPMS PAIA PCBTT PCF PDMC PMS POA PPF PSC SADC SALGA SDBIP SETA SLAs Local Economic Development Local Government Local Government Accounting Certificate-Accelerated Artisan Training Local Government Turn-around Strategy Local Municipality Municipal Demarcation Board Member of the Executive Council Municipal Finance Indaba Municipal Finance Management Act Municipal Infrastructure Municipal Infrastructure Grant Municipal Infrastructure Support Agency Municipal Public Accounts Committees Municipal Property Rates Act Municipal Systems Act Medium Term Expenditure Framework Nuclear, Biological, Chemical Response National Spatial Development Perspective National Youth Service Operation Clean Audit Operation Clean Audit Provincial Coordinating Committee Operation Expenditure Organisational Performance Management System Promotion of Access to Information Act Provincial Capacity Building Task Team Premier s Co-ordinating Forum Provincial Disaster Management Centre Performance Management System Programme of Action Public Participation Framework Public Service Commission Southern African Development Community South African Local Government Association Service Delivery and Budget Implementation Plan Sector Education and Training Authority Service Level Agreements Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017 9

10 SMS SOP TC TL TMR TOR TSC USAR WC/WDM WWTW Senior Management Service Standard Operating Procedures Traditional Council Traditional Leadership Transformation, Modernisation and Re-industrialisation Terms of Reference Technical Steering Committee Urban Search and Rescue Water Conservation/Water Demand Management Waste Water Treatment Works 10 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

11 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

12 3. FOREWORD BY THE MEC The year under review, was with no doubt, a very eventful period. This Annual report is a balanced overview of the service delivery environment in which Gauteng CoGTA operates. The document focusses on factors that influence and support the department s delivery record. In addition, it also highlights the challenges we encountered, the solutions implemented to counter those challenges and the overall achievements we had, despite and notwithstanding the stumbling blocks along the way. A very well known Zulu proverb says, A tree is known by its fruit. With this saying in my mind, I am proud to highlight a few of our Department s many proud achievements over this period. During February this year, our Urban Search and Rescue Team (USAR) successfully completed a vigorous International Search and Rescue Advisory Group (INSARAG) External Classification process. This process evaluates the competency of disaster Mr. Paul Mashatile response teams and their ability to make a meaningful Member of the Executive Committee contribution when deployed internationally to assist countries that have been struck by disaster. The team, which is only in its 3rd year since inception, became the second team on the continent to be awarded with the classification status. Urban Search and Rescue is a specialised emergency services field that deals with the location, extrication and initial medical stabilisation of victims. USAR teams conduct search and rescue operations in collapsed structures, and provide emergency medical care to trapped victims. There is certainly a need for a strong Urban Search and Rescue capability to respond effectively to disaster stricken areas and to save as many lives as possible. Another achievement worth mentioning is the department s role in the successful merger between the Westonaria and Randfontein municipalities. Prosperous growth is in the order of the day Randfontein and Westonaria when they become a single municipality in August The turning point in the fortunes of these two municipalities was achieved through a lengthy process and through consultations with the communities. It now has 69 councillors instead of 75. It is certain that this reduction in numbers will ensure that councillors are more accountable to communities as well as bringing improved cost efficiency. A streamlined system of inter-governmental relations will contribute to the building of local government in a more coordinated manner and improve service delivery through collaboration and economy of scale. The third example I want to highlight, is the very important role CoGTA played in the run up to and during the 2016 Local Government elections. An idea that comes to mind when mentioning the manner in which the department took this task to heart, is a quote by a certain Arthur Vogel when he said, There can be no true response without responsibility; there can be no responsibility without response. Gauteng CoGTA has a pivotal role in ensuring that local residents play a meaningful part in the programmes and projects that affect their lives in their local communities. This includes engagements in the Integrated Development Plans (IDPs) hearings, service delivery Izimbizo and other public fora with a view to enable and empower citizens to make informed decisions about their lives, thereby also minimising violent protests. Currently the department had to adapt to the vast level of changes in the scope of delivery following the Local 12 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

13 Government elections. The changes on political levels had a direct impact on our departmental focus and brought about a completely new set of challenges. One such challenge was the sustainability of the relationships and co-operation between local government and our communities. As a solution, and what can be considered as a feasible intervention, we had to review our current capacity in this regard and refocus on ward committee induction to ensure their functionality and to adhere to rational functionality criteria. Another aspect of our responsibility that lies very close to my heart is the matter of our Traditional Affairs and in particular the sacred cultural practice of initiation. Following several disturbing reports concerning initiation schools in our province, I, together with my provincial counterparts from other stakeholders such as Department of Community Safety, CONTRALESA and other local formations embarked on a drive to educate the community about the practice of initiation as well as the legalities around it. This education drive came in light of reports that highlighted and revealed shocking criminal activities and criminal elements that infiltrated a number of initiation schools in Gauteng. I am of the opinion that the situation at some of these initiation schools are not only disturbing and shocking, but it is also far from a representation of the cultural practice. We have our work cut out for us. Together with our counterparts in law enforcement and CONTRALESA, we will spare no effort to put a stop to these criminal practices and work together to bring the kingpins and other criminal elements to book. With every new challenge, comes a renewed realisation that we are more committed than ever to overcome and to reach the goals we set out for ourselves to improve the lives of the people we are sworn to serve. When we as a department are expected to perform our duties, whether it is the strengthening of our administrative capacity, or fighting fires to save lives, there is no doubt that we are geared towards delivering the best service, a service our communities deserve. Mr. Paul Mashatile Member of the Executive Council: Department of Co-operative and Governance Traditional Affairs and Human Settlements Date: 31 May 2017 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

14 4. REPORT OF THE ACCOUNTING OFFICER OVERVIEW OF THE OPERATIONS OF THE DEPARTMENT As a responsible Government department, CoGTA s priority is service delivery: transparency, local empowerment that considers competency and quality of service; regular consultation and urgency of service delivery. This annual report is an account of the department s achievements, challenges, interventions, programmes and deviations as well as expenditures for the period under review. Someone once said that restoring responsibility and accountability is essential to economic and fiscal health of our nation. As the accounting officer for the department of Co-operative Governance and Traditional Affairs (CoGTA), I could not agree more with this observation. The year under review was marked Mr. Nhlakanipho Nkontwana with an array of profound and very significant events that in Head of Department some cases directly resulted in a total paradigm shift in our approach to our tasks at hand. Being a growing entity, the Local Government sector faces constant and ongoing change. It is shaped by multiple trends that are affecting government and business across the country. These trends: macro-economic, social and environmental, and business will not only influence and determine new policies, but also transform the way that government and agencies are led and managed. I am honoured to have been afforded the opportunity to serve the people of Gauteng during the 2016/17 financial year. Following the successful Local Government elections, the department focused on providing targeted support to municipalities in terms of Ward Committee establishment. However new councils experienced a myriad of challenges. Notwithstanding that, I am proud to announce that more than 50% of the Ward Committees have been established with the remainder being planned for establishment in May 2017 by both the City of Tshwane and Merafong Local Municipalities. The department in collaboration with SALGA ensured that the councillors were inducted to ensure that they adjust to their new roles seamlessly. Notably, the issue of hung municipalities became a reality after the Local Government elections. Since their inauguration, some of the hung municipalities have proven to have serious challenges from governance point of view, especially owing to the fact that no formal coalition agreements were entered into. Examples of challenges in these municipalities include failure for councils to meet and conclude meetings, physical fights that erupt during council meetings, failure to appoint acting municipal managers, and processes to remove certain office bearers. The Provincial Department of CoGTA has had to get involved on numerous occasions to re-establish unity and encourage working together for the good of the communities residing in those municipalities. Ward Committee Induction was concluded in six of the nine Municipalities as from 30 April Since the beginning of the new term of office for Councils, various communities have been engaging on protracted action alleging lack of service delivery. The department will continue to try to come up with innovative ways to provide targeted support to municipalities, which should ultimately lead to improved service delivery for the citizens of Gauteng. 14 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

15 The department had 67 targets planned for the year and was able to achieve 60 of these targets, with seven not achieved. This translates into 88% achievement. Programme 4 was able to achieve all the planned targets for the year. The four programmes of the department performed as follows: Programme 1: Administration 90% Programme 2: Local Government and Support 88% Programme 3: Development Planning 86% Programme 4: Traditional Institutional Management 100% Improving Municipal financial viability This report will also reflect on how the Gauteng Department of CoGTA has been supporting municipalities to achieve clean audits and therefore clean governance. The Department has implemented many initiatives within the municipal space, which have brought stability to municipalities, especially in the area of Governance of Municipal Finances through Operation Clean Audit (OPCA) in collaboration with the Provincial Treasury. For the first time in history, Gauteng municipalities received unqualified audit outcomes, which is a step towards the right direction. However, three of the municipalities regressed from clean audit opinions to unqualified opinions with two of the municipalities moving from adverse opinions to unqualified opinions. Only Midvaal Local Municipality was able to maintain a clean audit outcome. Furthermore, Gauteng CoGTA and Gauteng Treasury have established a Debt Management Committee (DMC), which is aimed at supporting municipalities by ensuring that National and Provincial Departments pay the debt owed to Gauteng municipalities. The DMC convenes monthly engagements and weekly working sessions in an attempt to resolve debt owed to Municipalities by Government Departments. The DMC initiatives are focused on Departments that owe municipalities the higher amounts. Affected Departments are Education, Infrastructure Development, Roads and Transport, Health, Social Development, Human Settlement and National Public Works. This has led to the debt being owed to municipalities being less than 10%. Access to Basic Services CDWs continued to support government programmes through the advocacy initiatives and participatory democracy process, cases were dealt with by CDWs in this financial year and referred to the Premier s hotline and relevant stakeholders. The department also provided support to Ward Committees and the Integrated Development Programme (IDP) through community mobilisation. Community mobilisation was also done for Izimbizo across different municipalities. The department is in the process of finalising the Provincial Public Participation Framework in order to ensure that this programme reaches its highest potential. There are challenges in relation to water conservation, where municipalities are to implement technical and social interventions of the Water Conservation and Demand Management Strategy to reduce water losses by 3.7 per cent by the end of the 2016/17 financial year. Challenges relates to the ageing infrastructure in Lesedi and capacity constraints in the other municipalities. The department is thus in the process of placing artisans in municipalities to address the water technical losses. In facilitating and supporting the implementation of WC/ WDM AMD Interventions and Rain Water Harvesting by Municipalities and Sector Departments, the department is implementing WC/WDM by providing support through the installation of Rain Water Harvesting systems in 12 schools and the Emergency Works project (short-term solution) in the Eastern, Central and Western Basins, pumping and neutralising on average 86, 72 and 30 million litres AMD per day respectively. Internal environment We, however, also had performance areas where we were not as successful in reaching the target goals we set out to achieve within the said period. One such example is that the department has not been in a position to fill in Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

16 all its vacant positions during the 2016/17 financial year and had to place a moratorium to ensure that there was no overspending with regard to the compensation of staff. The Strategic Plan is based on the department having the capacity to implement it fully but in this instance, the department had to reprioritise interventions that will have a high impact but require fewer resources to achieve them. DPSA has since been requested to assist with the review of the organisational structure to ensure that the department meets its legislative mandate. This process is likely to take approximately six months. Key Management During the year under review, the Department managed to fill the position of Director: Energy, Director: Stakeholder and Liaison, promotion of Chief Director: Corporate Management and Chief Director: B2B and lose the services of the Director: Stakeholder and Liaison. Overview of the financial results of the Department The Department is not a revenue generating institution due to the nature of the services and its offerings; however, the Department managed to collect more than its targeted revenue during the reporting period. The major area of revenue collection for the Department was parking fees from staff members, commission for collection funds on behalf of third parties from the payroll and sales of tender documents. The additional revenue is made up of once off funds surrendered by the City of Tshwane. These funds were allocated to the city during the two previous years but, for some reason, the city could not spend the same, see Table 1 for further details. During the same period, the Department was allocated R from the equitable share; of this amount R resulting in 88% of the allocated funds being spent. The Department hopes to get the remaining fund as rollover during the ensuing financial year. See Table 2 for further details. Table 1: Revenue Departmental receipts Estimate 2015/ /2017 (Over)/ Estimate Amount Under Amount Collected Collection Collected (Over)/ Under Collection Sale of goods and services other than capital assets R 000 R 000 R 000 R 000 R 000 R (151) (179) Interest, dividends and rent on land Financial transactions in assets and liabilities (1 065) TOTAL (1 222) The over-collection of revenue of R1 222 million was due to the amount paid back by the City of Tshwane as a refund for grants previously allotted to the city but not spent. The City made an application to rollover the funds to the next financial year, as required by Division of Revenue Act (DORA), but the request was declined, primarily because it made similar requests on the very same funds in the past three financial years. 16 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

17 Table 2: Expenditure Programme Name Final Appropriation 2015/ /2017 (Over)/ Under Final Expenditure Expenditure Appropriation Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Administration Local Governance Development and Planning Traditional Institutional Development TOTAL The under expenditure of 12% was primarily due to some of projects that were not concluded by the end of the reporting period whereas funds for the same projects were allocated during the adjustment budget period. To name a few, the projects include, the water infrastructure pipeline in Merafong and the Disaster relief temporary settlements, included is the procurement of the equipment for the Provincial Disaster Management Centre (PDMC). The other contributing factors to the under expenditure are projects that were concluded but not implemented by the end of the reporting period. The programme that experienced the most under expenditure is (Programme 3) which is Development and Planning as result of the R40 million received during an adjustment budget. In terms of economic classification, the under-expenditure is attributed to capital expenditure of which only 21% or R4.1 million of the total allocation of R20 million was spent because of reasons mentioned above. Programme 1: Administration The programme was allocated a total budget of R million of which R was spent i.e. 97% of the total budget allocated. Although only 3% of the budget was not spent, it represents about R3 million. At the beginning of the financial year, the Department had a plan to purchase furniture and equipment for staff members but due to limited office space the plan could not materialise and hence the programme under spent. Programme 2: Local Governance The programme was allocated a total budget of R million during the reporting period of which R i.e. 97% was spent during the same period. Although 3% under expenditure is considered insignificant, it represents about R6, 3 million. This amount was not spent as result of delays in the acquisition of the tools of trade for Community Development Workers. Programme 3: Development and Planning The programme was allocated a budget of R million and an amount of R million i.e. 72% was spent. This was the least spending programme during the reporting period; an amount of R 50 million could not be spent due to the following reasons: 1. An additional R40 million was allocated during the adjustment budget period or October 2016 and as result of necessary procurement the actual project were implemented late in the reporting period. 2. The Department experienced difficulties in securing land to locate the victims of floods that took place in December 2016 and January 2017 and as a result, the Department could not take delivery of the temporary accommodation facilities. The Department will apply for the funds to be rolled-over to the next financial year and continue with the relevant projects. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

18 Programme 4: Traditional Institutional Management This programme had the least budget allocation of R million, of which R million i.e. 97% was spent. The allocation was not fully dispersed due to non-allocation of funds to one Traditional Council due outstanding financial reports. Virements/roll overs Virements The Department did not effect any Virements during the reporting period. Rollovers The rollovers to an amount of R49.8 million has been requested from the Provincial Treasury as part of the capital amount and goods and services that will be utilised to procure the equipment for PDMC and C4 Mobile Unit including the procurement of corrugated iron structures for disaster relief project. Also requested as part of rollover approval are funds earmarked for the installation of infrastructure water pipe for Merafong Local Municipality. Unauthorised Expenditure The Department did not incur any unauthorised expenditure during the reporting period. Fruitless and Wasteful expenditure The Department did not incur any fruitless and wasteful expenditure during the period under review. Future plans of the department The department will continue to provide post-merger support to the newly established Rand-West City Local Municipality. Improving and sustaining sound financial management will require the department to provide support to the newly merged municipality with hands-on support for the rolling out and cascading of level 3-5 of the Automated Performance Management System. The municipality will also be provided with support in reviewing its medium- to long-term Human Resource Plans and Scarce and Critical Skills Strategies based on the municipalities Integrated Development Plans (IDPs). They will also be supported with the development and design of a functional organisational structure so that they can carry out their service delivery mandates. The Community Development Workers (CDWs) will continue to support the implementation of the Public Participation Framework through advocacy initiatives and the participatory democracy processes and in particular the IDP process, ward committees and Izimbizos. In the coming financial year, the department will commence to configure the Community Development Workers Programme through the integrated Community Worker Model, which will be tabled to EXCO this year. To contribute to the Gauteng City-Region, the Department will scrutinise and revitalise the Integrated Development Plan (IDP) processes by ensuring that engagements between sector departments continue to be strengthened. The aim is to improve the quality of IDPs to ensure that they represent the needs of communities. Furthermore, the strengthening of the Provincial coordination of the B2B activities, including the mobilisation of sector departments, will receive dedicated attention with quarterly meetings being held to monitor progress. The Municipalities will be expected to ensure alignment of the B2B Ten Point Plan with priority actions with new IDPs and provide monthly reports, as directed by the Minister of Co-operative Governance and Traditional Affairs. The provincial Disaster Management Centre will be functional in the 2017\18 financial year and it will be capacitated in order for the province to be able to respond effectively to disasters. The municipal Disaster Management Centres will continue to be monitored to ensure that they remain functional. 18 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

19 Discontinued activities / activities to be discontinued There were no activities discontinued during the reporting period and the Department does not have any plan to discontinue any activity in the next financial year. New or proposed activities The Department did not have any new activity during the reporting period and has no proposal for the new activity in the next twelve months. Supply chain management There were no unsolicited bids during the reporting period, all bids awarded were based on open tender or the Department was granted deviation from normal supply chain process owing to the urgency of the requirements, mainly disaster relief. The Department periodically review all its vouchers to detect any irregular and fruitless expenditure. During the reporting year, transactions, which were considered irregular, were identified and the irregular expenditure register was updated and reported to Provincial Treasury as required by Treasury Regulations. The major internal challenge faced by supply chain management unit was level of understaffing and as a result, there may have been one or two delays in procurement. Furthermore, there are instances where staff outside the unit procured either the goods or services or some interaction with the service providers, resulting in serious complication, hence the increase in the value of irregular expenditure. The other major challenge was the implementation of the Township Economy, as most of the service providers in the targeted area were not compliant in terms of the existing regulation, and some did not have the funds to execute the work allocated to them, while others effected delivery late. The Department is currently drafting the supplier development strategy to augment the wonderful work done by the Department of Economic Development through the Qondisa Ishishini Lakho project. Gifts and Donations received in kind from non-related parties According to our existing gifts registers there were no staff members who received any donation or gift of a designated amount from non-related party, moreover the Department did not receive any donation from a nonrelated party during the reporting period. Exemptions and deviations received from the National Treasury The Department was not granted any deviation nor exemption from the reporting requirements of Public Finance Management Act (PFMA) or Treasury Regulations. Events after the reporting date There were no favourable/unfavourable events that occurred after the reporting date Acknowledgement/s or Appreciation I would like to thank the Honourable MEC and the Executive Management Team for their effort and hard work and also CoGTA staff at all levels for their continued commitment to ensuring that the department meets its statutory obligations. Mr. Nhlakanipho Nkontwana Head of Department Date: 31 May 2017 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

20 5. STATEMENT OF RESPONSIBILITY AND CONFIRMATION OF ACCURACY FOR THE ANNUAL REPORT To the best of my knowledge and belief, I confirm the following: All information and amounts disclosed throughout the annual report are consistent. The annual report is complete, accurate and is free from any omissions. The annual report has been prepared in accordance with the guidelines on the annual report as issued by National Treasury. The Annual Financial Statements (Part E) have been prepared in accordance with the modified cash standard and the relevant frameworks and guidelines issued by the National Treasury. The Accounting Officer is responsible for the preparation of the annual financial statements and for the judgements made in this information. The Accounting Officer is responsible for establishing, and implementing a system of internal control that has been designed to provide reasonable assurance as to the integrity and reliability of the performance information, the human resources information and the annual financial statements. The external auditors are engaged to express an independent opinion on the annual financial statements. In my opinion, the annual report fairly reflects the operations, the performance information, the human resources information and the financial affairs of the department for the financial year ended 31 March Yours faithfully Mr. Nhlakanipho Nkontwana Accounting Officer: Department of Co-operative Governance and Traditional Affairs Date: 31 May Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

21 6. STRATEGIC OVERVIEW 6.1. Vision Globally competitive Gauteng City Region, putting people first with service delivery excellence and economic performance Mission To facilitate and support co-operative governance across all spheres of government and associated institutions, and to promote the institution of traditional leadership - for Gauteng Values Achieving the vision, requires the Department to adopt and adhere to service delivery values, as indicated below. The Department has adopted a set of values that are informed by the Batho Pele (People First) principles of the South African Public Service and, as an organisation, its specific focus is on the following: Respect: We treat employees, customers, partners and suppliers with mutual respect and sensitivity, recognising the importance of diversity. We respect all individuals and value their contributions. Integrity: We employ the highest ethical standards, demonstrating honesty and fairness in every action and service we provide. Caring: We ensure that our service providers and we empathise with citizens, treating them with consideration and respect. We foster effective communication of services, products, information and problems, which may hamper or delay the efficient delivery of services to promised standards. Accountability: We accept our individual and team obligations and we meet our commitments to service delivery. We will account for our performance in all of our decisions and actions; and Innovation: We enable municipalities to introduce modern and innovative procedures and systems for the delivery of services. We are creative in our thought and in the execution of our duties, we seek innovative ways to solve problems and enhance effectiveness and efficiency within the context of the law. 7. LEGISLATIVE AND OTHER MANDATES The Department derives its mandate from the Constitution of the Republic of South Africa, 1996, (Act No. 108 of 1996) and other related national and provincial legislation. The following sections are extracts from the Constitution, which have a direct bearing on the province and municipalities in terms of delivering on their respective constitutional mandates. Section 139(1): Provides that the Provincial Executive may intervene if a municipality fails to fulfil an executive obligation. Section 152(1): Provides for democratic and accountable government for local communities; ensures the provision Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

22 of services to communities in a sustainable manner; promotes social and economic development; promotes a safe and healthy environment; and encourages the involvement of communities and community organisations in the matters of local government. Section 152(2): Stipulates that a municipality must strive, within its financial and administrative capacity, to achieve the objects as set out in subsection (1). It requires municipalities to provide a democratic and accountable local government. Councillors must be elected through a democratic process and must report back to their constituencies on decisions taken by the council. Section 154(1): Provides for support and strengthening the capacity of municipalities to manage their own affairs, exercise their powers and perform their functions. Section 154(2): Provides for drafting provincial legislation that affects the status, institutions, powers or functions of local government for approval by the Provincial Legislature; and for this legislation to be published for public comment before it is introduced in Parliament or a provincial legislature in a manner that allows organised local government, municipalities and other interested persons an opportunity to make representation with regard to the draft legislation. Section 155(6): Stipulates that provincial legislature must determine the different types of municipalities to be established in the Province and monitor, support and promote the development of local government and see to the effective performance by municipalities of their functions as per Schedules 4 and 5, and regulate the exercising by municipalities of their executive authority (Section 156 (1). Section 164: Stipulates that any matter concerning local government not dealt with in the Constitution may be prescribed by national legislation or by provincial legislation within the framework of national legislation. Chapter 12: Provides for the recognition of the institution of traditional leadership. Municipal Structures Act (No. 117 of 1998): Provides for the establishment of municipalities in accordance with the requirements relating to categories and types of municipalities and provides guidelines for the establishment and functions of ward committees. Municipal Systems Act (No. 32 of 2000) Amended Systems Act (July 2011): Provides for the core principles, mechanisms and processes that are necessary to enable municipalities to move progressively towards the social and economic upliftment of local communities, and ensure universal access to essential services that are affordable to all. Municipal Finance Management Act (No. 56 of 2003): Provides for the secure, sound and sustainable management of the fiscal and financial affairs of 22 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

23 municipalities and municipal entities by establishing norms and standards and other requirements for ensuring transparency, accountability and appropriate lines of responsibility in the fiscal and financial affairs of municipalities and municipal entities. Municipal Property Rates Act (No. 6 of 2004): Regulates the power of a municipality to impose rates on property and to exclude certain properties from rating in the national interest and makes provision for municipalities to implement a transparent and fair system of exemptions, reductions and rebates through their rating policies. Gauteng Type of Municipalities Act (No. 3 of 2000): Determines the types or categories of municipalities that can be established in the province. Rationalisation of Local Government Affairs Act (No. 10 of 1998): Provides for the rationalisation of the legislative and administrative framework for the local sphere of government. Gauteng Privileges and Immunities of Councillors Act (No. 1 of 2002): Defines the privileges and immunities of councillors in Gauteng municipalities. Disaster Management Act (No. 57 of 2002): Provides for an integrated and co-ordinated disaster management policy that focuses on preventing or reducing the risk of disasters, mitigating the severity of disasters, emergency preparedness and rapid and effective responses to disaster and post-disaster recovery. Gauteng Land Administration Act (No. 11 of 1996): Provides for the acquisition and disposal of land owned by the Gauteng Provincial Government. Development Facilitation Act (No. 67 of 1995): Facilitates and speeds up the implementation of the Reconstruction and Development Programme and associated projects. Public Finance Management Act (No. 01 of 1999 as amended): Enables public sector managers to manage and improve accountability in terms of eliminating waste and corruption in the use of public funds. Division of Revenue Act as amended: Provides for equitable division of revenue anticipated to be raised nationally among the national, provincial and local spheres of government for each financial year and the responsibilities of the three spheres pursuant to such division. Promotion of Administrative Justice Act (No. 03 of 2000): Gives effect to the constitutional right to just administrative action for any member of the public whose rights have been adversely affected and to ensure efficient, effective and legitimate administration within all spheres of government. Preferential Procurement Policy Framework Act (No. 05 of 2000): Gives effect to Section 217 (3) and provides a framework for the implementation of the procurement policy contemplated in Section 217 (2) of the Constitution. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

24 Promotion of Access to Information Act (No. 02 of 2000): Gives effect to the constitutional right of access to any information held by the State and any information held by a private person that is required for the exercise or protection of any other right. Intergovernmental Relations Framework Act (No. 13 of 2005): Establishes a framework for national, provincial and local government to promote and facilitate intergovernmental relations and to provide a mechanism and procedure to facilitate the settlement of intergovernmental disputes. Municipal Demarcation Act (No. 27 of 1998): Established the Municipal Demarcation Board, which is an independent authority responsible for determining municipal boundaries and determining wards within municipalities. Municipal Electoral Act (No. 27 of 2002): Establishes the Independent Electoral Commission (IEC) and regulates local elections. Gauteng City Improvement District Act (No. 12 of 1997): Provides procedures for the formation and independent management of city improvement districts to fund the provision of services in addition to those that a municipality ordinarily provides in order to facilitate investment in the city improvement district. Fire Brigade Services Act (No. 99 of 1987): Provides for the establishment, maintenance, employment, co-ordination and standardisation of fire brigade services and matters connected therewith. Traditional Leadership and Governance Framework Act (No. 41 of 2003): Provides for the recognition of traditional communities as well as the establishment and recognition of traditional councils and the establishment of the Commission on Traditional Leadership Disputes and Claims. National House of Traditional Leadership Act (No. 22 of 2009): Paves the way for the establishment of the National House of Traditional Leaders. Gauteng Traditional Leadership and Governance Act (No. 4 of 2010): Provides for the establishment and recognition of traditional communities in the Province. Gauteng Local Government Laws Amendment Act (No. 1 of 2006): Amends certain laws of the Gauteng Province pertaining to local government so as to eliminate references to defunct institutions and inconsistencies with other legislation, and repeal certain laws that are contrary to the Constitution of the Republic of South Africa 1996 or that no longer serve any useful purpose. Local Government Amendment Laws Act (No. 19 of 2008): Reviews the term of office of ward committees to be equivalent to the term of council. It also provides the legislative base for the funding model for ward committees. 24 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

25 Removal of Graves and Dead Bodies Ordinance (No. 7 of 1925): Provides procedures for exhumations and re-interment. Skills Development Act (No. 97 of 1998): Provides an institutional framework to devise and implement national, sector and workplace strategies to develop and improve the skills of the South African workforce. Employment Equity Act: Serves as a mechanism to redress the effects of unfair discrimination and to assist in the transformation of workplaces, so as to reflect a diverse and broadly representative workforce. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

26 8. ORGANISATIONAL STRUCTURE MEMBER OF THE EXECUTIVE COUNCIL SP MASHATILE CHIEF OF STAFF M VAN ECK HEAD OF THE DEPARTMENT B N NKONTWANA DIRECTORATE: TRANSFORMATION PROGRAMME P MABULE (ACTING) DIRECTORATE: EXECUTIVE SUPPORT T D MOKOENA DIRECTORATE: RISK MANAGEMENT L MATLALA BRANCH: DEVELOPMENT AND PLANNING BRANCH: LOCAL GOVERNMENT & COMMUNITY SUPPORT CHIEF DIRECTORATE: CORPORATE MANAGEMENT CHIEF DIRECTORATE: FINANCIAL MANAGEMENT SERVICES W BILA I MOKATE R NKABINDE J MAKHAFOLA CHIEF DIRECTORATE: MUNICIPAL INFRASTRUCTURE & IDP P K NGOEPE CHIEF DIRECTORATE: DISASTER MANAGEMENT & RESCUE SUPPORT SERVICES E SITHOLE CHIEF DIRECTORATE: MUNICIPAL PERFORMANCE MONITORING, EVALUATION & REPORTING R RAMOGAYANE CHIEF DIRECTORATE: MUNICIPAL GOVERNANCE & SUPPORT A MOONSAMY CHIEF DIRECTORATE: INTERGOVERNMENTAL RELATIONS AND TRADITIONAL INSTITUTIONAL MANAGEMENT J OBANDO (ACTING) CHIEF DIRECTORATE: PUBLIC PARTICIPATION AND COMMUNITY DEVELOPMENT C JARDIN (ACTING) 26 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

27 9. ENTITIES REPORTING TO THE MEC The Gauteng Department of Co-operative Governance and Traditional Affairs does not have entities reporting to the MEC. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

28 PART B PERFORMANCE INFORMATION 28 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

29 AUDITOR GENERAL S REPORT: PREDETERMINED OBJECTIVES The AGSA currently performs certain audit procedures on the performance information to provide reasonable assurance in the form of an audit conclusion. The audit conclusion on the performance against predetermined objectives is included in the report to management, with material findings being reported under the Predetermined Objectives heading in the Report on other legal and regulatory requirements section of the auditor s report. Refer to page 119 of the Report of the Auditor General, published as Part E: Financial Information. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

30 1. OVERVIEW OF DEPARTMENTAL PERFORMANCE 1.1 Service Delivery Environment One of the challenges we were faced with, was the prevalent violent community protests that threatened the very stability and effective governance of the Gauteng province. The province was able to hold successful Local Government elections with no incidence and for that we are grateful. These protests were not only about service delivery, but also about the way development and delivery was undertaken. The department will continue to support the Ntirhisano community outreach through the Community Development Workers to address these concerns. We have seen that Ntirhisano has turned around the mood in communities in an unprecedented manner. Through this kind of proactive and participatory approach to problem solving, we are restoring levels of trust and public confidence on the ground. Motivated by a greater sense of urgency, integrity and transparency, we will spend more time with the communities, solving problems together and speed up service delivery on all levels. In order to continue our local government transformation agenda, we need fully functional municipalities, which equally, must also be financially viable. Capacity building, training, skills development, hands-on approach, technical support, etc. will all help the municipalities perform better in discharging their responsibilities and mandates. Operation Clean Audit is yielding results and we will continue our partnership with the Provincial Treasury in order to realise more results in the upcoming financial year. 1.2 Service Delivery Improvement Plan The department has completed a service delivery improvement plan. The tables below highlight the service delivery plan and the achievements to date. Main services and standards Main services Beneficiaries Current/ actual standard of service Coordinate and facilitate the provision of municipal infrastructure and development planning Municipalities Seven local municipalities Desired standard of service Seven local municipalities and one Metro supported. achievement Six local municipalities were supported due to the merger between Randfontein and Westonaria Local Municipalities Provide capacity building, advocacy and advisory services to municipalities, traditional council and ward committees on public participation. Gauteng Citizens Regulatory framework for establishment of ward committees Regulatory framework for establishment of ward committees finalised The framework was finalised. 30 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

31 Batho Pele arrangements with beneficiaries (Consultation, access etc) Current/actual arrangements Desired arrangements achievements Currently the Department utilises the 3 spheres meeting on a monthly basis to discuss: Construction progress; Expenditure progress; Track performance; and Identify intervention strategies. Project site visits are also conducted twice monthly. One on one meetings with municipalities on a monthly basis, to discuss: Construction progress; Expenditure progress; Track performance; Identify intervention strategies; and Discuss interventions on skills shortages. Three coordinating structures were convened (MIG Three spheres, MIG Quarterly Infrastructure Planning and the Rainwater Technical Steering Committee). CAPEX War Room was held in Oct Only two site visit to Merafong & Mogale City Local Municipality took place. One on one meetings with Emfuleni LM, Rand West City LM, Merafong City LM Funding of infrastructure projects and infrastructure planning and Ekurhuleni Metro Consolidation of Eskom delivery points. Meetings, workshops quarterly. One quarterly engagement with traditional council on current challenges and possible resolutions or action plans. Ward Committee establishment has not been finalised but it is scheduled to be finalised in May The engagements will continue then. Service delivery information tool Current/actual information tools Desired information tools achievements No baseline Provide the following information through Workshops: 1. Infrastructure Planning performance assessments; 2. Capital Expenditure feedback sessions; (1 session) 3. Share Best practice in infrastructure planning and project Implementation. 1. Infrastructure Planning performance assessments did not take place; they were replaced by the one-on-one session for municipalities in need. 2. Capital Expenditure feedback session through the CAPEX WAR room and three sessions through (MIG Three spheres meetings). Complaints mechanism Current/actual complaints mechanism Information brochures on contacts for complaints Desired complaints mechanism Department brochures with contact details. achievements The department s brochure has been developed and will be printed in Organisational environment The department did not experience significant changes to the organisational environment. The Red Tape panel has been established in the department to develop interventions that will lead to the reduction of bureaucratic processes that lead to poor service delivery. 1.4 Key policy developments and legislative changes The Department does not have revision to its legislative mandate for the period in question and therefore its mandate has remained unchanged. There are no court rulings that have a bearing on the mandate of the Department. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

32 2. STRATEGIC OUTCOME ORIENTED GOALS The following are the Department s Strategic Goals and significant achievements with regard to outcomes: Strategic Goals Achievements Facilitate Local Government to ascend to World Class GCR (to include Traditional Leadership). Ongoing environmental and customer diagnostics. Transform CoGTA to a professional, impacting operational Department with high performance. The merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections as a single municipality: RandWest LMs. Municipalities submitted a detailed 5-year IDP aligning with TMR objectives, which is underpinned by the B2B Phase 2 10-point plan to move to a GCR and high level 10- and 15-year plans. Municipalities were supported to comply with Disaster Management Legislative Requirements. Municipalities supported on the development of ward level database with community concerns and remedial actions produced through the Premier s Hotline and Ntirhisano war room. Through door to door work, CDW assisted communities to identify and communicate their needs and concerns to government CDWs assisted the municipalities in mobilising the communities to attend the Integrated Development Plans (IDPs) meetings and other activities; they also attended these meetings and made inputs on the identified needs of the community. 100% of staff were placed in the Organisational Structure aligned with Financial structure Skills Audit completed. 32 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

33 3. PERFORMANCE INFORMATION BY PROGRAMME 3.1 Programme 1: ADMINISTRATION Purpose of the Programme This programme focuses on strengthening the administrative capacity and capability of the Department, to ensure that the Department is able to deliver on its policy and legislative mandate. It relates to Outcome 12: An efficient, effective and development-oriented public service. The work of the programme is linked to national Outcome 12: An efficient, effective and development-oriented public service. As a strategic partner to business units, this programme provided the necessary support services (financial, human capital and tools of trade) to enable the core programmes to achieve the set strategic objectives. Sub-Programmes Back to Basics Human Capital Management Finance Management Risk Management Strategic Objectives for 2016/17 Financial Year Facilitate and support institutions of Local Government - and traditional leadership -professional functional capabilities to ascend to envisioned world class. Develop, attract and retain high levels of professional competence to influence local governance effectively. Transform the organisation climate. Enhance good governance. To develop a service delivery model that strengthens and enhances business processes, systems, decision rights and accountability, quality and innovation. To develop dynamic leadership that will promote good corporate governance and ensure the realisation of the Department s mission and strategic goals. Key Achievements Back To Basics Report on the implementation of the Back to Basics (B2B) priority support actions in three targeted local municipalities three (Emfuleni, Rand West City and Merafong City LMs). Out of 67 combined priority support actions of the three targeted Local Municipalities (LMs), 50 (75%) are achieved the level of implementation and five (10%) shown progress as at end of March Performance against B2B priority support actions in three targeted Municipalities Emfuleni LM: Out of 20 priority support actions, 16 (80 %) have been achieved and one (5%) has shown progress. Rand West City LM: Out of 24 priority actions plan, 17 (71%) have been achieved and four (16.7%) have shown progress. There is no progress on the implementation of one (4%) priority action. Merafong LM: Out of 23 priority support actions, 17 (74%) are achieved and two (9%) have shown progress. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

34 Graph 1: Overall performance as per targeted Municipalities 34 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

35 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Back to Basics Programme Name: Administration Sub-Programme: Back to Basics Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Facilitate and Support Institutions of Local Government - and traditional leadership -professional functional capabilities to ascend to envisioned world class. Number of municipalities supported to improve performance through Back-to- Basics perspective. Improvement of the Westonaria and Randfontein Municipalities from municipalities at risk to doing well. Four local municipalities with 60% of the action plan implemented in targeted municipalities (Merged Westonaria/ Randfontein, Emfuleni and Merafong Local Municipalities). Three local municipalities: Out of 67 combined priority supporting actions, 49 (73%) are achieved and 7 (10%) shown progress. Emfuleni LM: Out of 20 priority support actions, 16 (80%) have been achieved and 1 (5%) has shown progress. Rand West LM: Out of 24 priority actions plan, 17 (71%) have been achieved and 4 (17%) shown progress. Merafong LM: Out of 23 priority support actions, 16 (70%) are achieved and 2 (9%) has shown progress The merger of Westonaria and Randfontein municipalities led to the four municipalities becoming three. The Departmental support functions (Public Participation, Infrastructure, MIDP, Revenue Enhancement and Institutional Support) increased support to municipalities and municipalities gave their cooperation. None. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

36 Sub-Programme: Human Capital Management Programme Name: Administration Sub-Programme: Human Capital Management Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Develop, attract and retain high levels of professional competence to influence local governance effectively. Percentage of posts filled within 6 months of becoming vacant. Percentage of Employment Equity target reached for women in SMS positions. 50% of critical vacant positions filled in line with the functional structure 30% of Employment Equity target reached for women in SMS positions. 50% of posts filled within 6 months of becoming vacant. 30% of Employment Equity target reached for women in SMS positions. Planned Target not achieved. 35% of employed women in SMS positions. No posts were filled within 6 months of becoming vacant. The department has effectively implemented the retention strategy for women at SMS. Posts could not be filled due to a moratorium on filling of posts because of a limited budget. None Percentage of Employment Equity target reached for people living with disabilities 1% of Employment Equity target reached for people living with disabilities. 1% of Employment Equity target reached for people living with disabilities. 1.4% of employed people living with disabilities. The department has effectively implemented the retention strategy for people living with disability None Percentage of the development plan implemented. New Indicator Skills Audit completed. Skills Audit completed. None. None. Percentage of staff placed in organisational structure aligned with financial structure. New Indicator 100% of staff placed in organisational structure aligned with financial structure. 100% of staff were placed in the Organisational Structure aligned with Financial structure None. None. Transform the organisation climate Number of staff engagement surveys and a SWOT analysis conducted. New Indicator. One staff engagement survey and a SWOT analysis conducted. One staff engagement survey and a SWOT analysis conducted. None. None. Enhance good governance. Percentage completion of implementation of Information Technology Infrastructure Library (ITIL) standards. New Indicator. Percentage completion of implementation of Information Technology Infrastructure Library (ITIL) standards. The overall percentage of whole ITIL implementation is 60%. There were projects that were fast tracked due to the needs of the department. None. 36 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

37 Sub-Programme: Finance Management Programme Name: Administration Sub-Programme: Finance Management Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Enhance Good Governance. Percentage of service providers paid within thirty days as prescribed by the PFMA. 95% of invoiced paid within thirty days as prescribed by Public Finance Management Act Payment of all service providers within thirty days. 100% of invoiced paid within thirty days as prescribed by Public Finance Management Act Payment of all service providers within thirty days. 100 % of invoiced paid within thirty days as prescribed by Public Finance Management Act Payment of all service providers within thirty days. None. None. Sub-Programme: Risk Management Programme Name: Administration Sub-Programme: Risk Management Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations To develop dynamic leadership that will promote good corporate governance and ensure the realisation of the Department s mission and strategic goals. Number of Strategic Risk Assessment conducted. One Departmental Strategic Risk Register/Report One Strategic Risk Assessment conducted. One Strategic Risk Assessment conducted. None None Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

38 Provide reasons for deviations No posts were filled within 6 months of becoming vacant. Strategy to overcome areas of under performance The department will request more funding from relevant stakeholders. Changes to planned targets The department did not change performance indicators or planned targets during the reporting period. Linking performance with budgets The programme was allocated a total budget of R million of which R was spent i.e. 97% of the total budget allocated. Although only 3% of the budget was not spent, it represents about R3 million. At the beginning of the financial year, the Department had a plan to purchase furniture and equipment for staff members but due to limited office space the plan could not materialise and hence the programme under spent. Sub-programme expenditure Administration 2015/ /2017 Final Appropriation Expenditure (Over)/Under Expenditure Final Appropriation Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Office of the MEC Corporate Services TOTAL Programme 2: LOCAL GOVERNANCE Purpose of the Programme The Programme seeks to strengthen the developmental state by enhancing participatory governance and institutional stability as well building the capacity and capability of local government to achieve its constitutional mandate. The goal of the programme is to promote and facilitate viable and sustainable local governance. Sub-Programme Governance and Intergovernmental Relations (IGR) Public Participation Community Development Workers Municipal Finance Support Municipal Institutional Support Municipal Performance Monitoring and Evaluation (Finance) Municipal Performance Monitoring and Evaluation (Service Delivery) GEYODI Policy and Research 38 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

39 Strategic Objectives for the financial year under review Enhance good governance Define and continually survey the total environment impacting on the implementation and functioning of GCR. Continually monitor and evaluate CoGTA and Local Government Performance Support and strengthen good governance; financial management and viability; the quality of institutional and administrative capacity and practice of local government institutions Facilitate and Support Institutions of Local Government - and traditional leadership -professional functional capabilities to ascend to envisioned World Class Continually monitor and evaluate CoGTA and LG Performance Key Achievements Governance And Intergovernmental Relations (IGR) Municipalities City of Tshwane and Ekurhuleni Metro, Mogale City, Emfuleni and Merafong reviewed and aligned their anti-corruption strategies and fraud prevention plans to the National Integrity Framework. A report on functional provincial Anti-corruption technical working groups was developed. Community Development Workers Programme(CDWP) Service Delivery Cases Attended/Referred To Municipalities, Provincial And National The functional responsibility of the CDWP is to promote good governance and develop sustainable communities. The CDW programme further focuses on development work that strengthens the ability of communities to access government services, build their structures and skills so that they are better able to improve on their standard of living and participate in the economic sector. CDWs have through door-to-door work, assisted communities to identify and communicate their needs and concerns to government. Apart from disseminating information, they also through the door-to-door approach ensured that communities are aware of and participate in various advocacy campaigns around social and economic issues. CDWs have played a role in ensuring that government is accessible and responsive to the needs of citizens by referring identified cases to the relevant government departments. CDWs also identified blockages that delay service delivery and reported them to the relevant government departments for their attention. In total, CDWs dealt with 24,020 cases during 2016/17 financial year: Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

40 Breakdown of cases by municipality City of Jhb MM City of Tshwane MM Home Affairs City of Ekurhuleni MM Mogale RandWest Merafong City LM City LM City LM Emfuleni Midvaal LM LM Lesedi Total LM Education Labour Roads/ Transport Safety, Security Justice Economic Dev Social Dev Basic Services Housing Land Agriculture Environment SRAC Water Affairs Health OTHER TOTAL GEYODI The department organised a one-day workshop for women in Sedibeng Region on the 19th October 2016 to empower 150 women residing within the jurisdiction of the Emfuleni Local Municipality. The purpose of the workshop was to empower women on integrated development planning (IDP), public participation and supply chain management processes. The department donated the clothes from the departmental staff and a R voucher to a non-governmental organisation (NGO) for people with disabilities (Elethu Cheshire Home) in Daveyton in 2016/ 2017 Financial Year. As part of a government campaign on activism against the abuse of women and children, the department also collected clothes from the staff of the department and donated them together with a R voucher to a shelter for the abused women and children in Eldorado Park 9 Women s Forum) in 2016/ 2017 Financial Year. 40 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

41 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

42 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Governance and Intergovernmental Relations (IGR) Programme Name: Local Governance Sub-Programme: Governance and Intergovernmental Relations (IGR) Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Enhance Good Governance. Number of Municipalities meeting CoGTA s local government support model measures at 70% or more. New Indicator 0 None The department intended to develop the model in the 2016/17 financial year. None Number of municipalities with anti-corruption strategies and fraud prevention plans. 12 municipalities develop and implement anti-corruption strategies and fraud prevention plans. Seven municipalities review and align their anticorruption strategies and fraud prevention plans to the National Integrity Framework. Seven municipalities (City of Joburg, City of Tshwane, Ekurhuleni, Emfuleni, Mogale, Rand-West City and Merafong) reviewed and aligned their plans to the National Integrity Framework. None. None. Number of reports on functional provincial Anticorruption technical working groups developed. New Indicator. One report on functional provincial Anticorruption technical working groups developed. One report on functional provincial Anticorruption technical working groups was developed. None. None. Number of reports on fraud, corruption and maladministration cases reported and investigated. 50% of National Anti-corruption cases reported to the PSC detailing the number of cases resolved. Four reports on fraud, corruption and maladministration cases reported and investigated Four reports on fraud, corruption and maladministration cases reported and investigated were produced. None. None. 42 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

43 Sub-Programme: Policy and Research Programme Name: Local Governance Sub-Programme: Policy and Research Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Define and continually survey the total environment affecting the implementation and functioning of GCR. Number of research reports on key local government policy issues. New Indicator. Four research reports on key local government policy issues. Five approved research reports have been completed: 1. Cutting red tape in the institutions of government for sustainable economic development in the Gauteng city region: A research perspective; 2. A perspective and proposals on allocation of powers and functions between the provincial and local spheres of government in the province; 3. Research Report on Gauteng s State Of Readiness for the 2016 Local Government Elections; 4. Report on the State of Initiation practice in Gauteng: The Second Season. Initiation; and 5. Preliminary Initiation Report for the Gauteng Province: Winter Season One additional report was developed due to the EXCO requesting for it to be developed. None. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

44 Sub-Programme: Public Participation Programme Name: Local Governance Sub-Programme: Public Participation Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Continually monitor and evaluate CoGTA and Local Government Performance. Number of Ward Committees in Gauteng adhering to national functionality criteria. Facilitate and support the functionality of 457 (90%) ward committees in Gauteng. 175 Ward Committees in Gauteng adhering to national functionality criteria. 257 Ward Committees have been inducted and are functional (Mogale City Local Municipality, Rand West Local, Ekurhuleni Metropolitan Municipality, Emfuleni Local Municipality, Midvaal Local Municipality and Lesedi Local Municipality). The Public Participation unit focussed all the majority of their resources to achieving this task. The department received support from National CoGTA, SALGA and the IEC provided advice where required. None Number of municipalities supported on the development of ward level database with community concerns and remedial actions produced (Sub -outcome 2, Action 5). New Indicator. 11 municipalities supported on the development of ward level database with community concerns and remedial actions produced (Sub -outcome 2, Action 5). 11 municipalities supported on the development of ward level database with community concerns and remedial actions produced through the Premier s Hotline and Ntirhisano war room. One municipality less due to the merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections as a single municipality : RandWest City LMs. None. Number of reports on the number of community report back meetings convened by Councillors in each ward (Sub-outcome 2, Action 7). Four community reports back meetings convened by Councillors in each ward (Sub-outcome 2, Action 7). One community report back meetings convened by Councillors in each ward (Suboutcome 2, Action 7). Planned target not achieved due to Ward Committee establishment not being finalised. Three municipalities have not finalised their Ward Committee establishment. COJ established ward committees and is planning induction for May. COT did not establish ward committees due to internal delays. Merafong experienced delay due to staffing. This will be finalised by end April. Establishment will be in May with induction to follow. 44 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

45 Sub-Programme: Community Development Workers Programme Name: Local Governance Sub-Programme: Community Development Workers Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Continually monitor and evaluate CoGTA and Local Government Performance. Number of programmes supported through community mobilisation. 12 programmes supported through community mobilisation. 12 programmes supported through community mobilisation. 14 programmes were supported through community mobilisation. The additional thematic programmes were due to advocacy initiative campaigns around social and economic issues. None. Number of reports on individual and community service delivery cases referred to municipalities, provincial and national departments. Individual and community service delivery cases attended to and/or referred to War Room, municipalities, provincial and national departments. Four reports on individual and community service delivery cases referred to municipalities, provincial and national department. Four reports on individual and community service delivery cases referred to municipalities, provincial and national department were produced. None. None. Number of reports on participatory democracy processes supported, e.g. through the IDP process and support to ward committees and role played by CDWs. Support to municipalities and government. Departments with participatory democracy process, in particular the IDP process, ward committees, imbizos. Four reports on participatory democracy processes supported, e.g. through the IDP process and support to ward committees and role played by CDWs. Four reports on participatory democracy processes supported, e.g. through the IDP process and support to ward committees and role played by CDWs. None. None. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

46 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Municipal Finance Support Programme Name: Local Governance Sub-Programme: Municipal Finance Support Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Support and strengthen good governance; financial management and viability; the quality of institutional and administrative capacity and practice of local government institutions. Number of municipalities monitored on implementation of Audit Response Plan based on the 2014/15 audit outcomes as per MFMA section municipalities monitored on implementation of Audit Response Plans based on the 2014/15 audit outcomes. 12 municipalities monitored on implementation of Audit Response Plan based on the 2014/15 audit outcomes as per MFMA section municipalities were monitored on implementation of Audit Response Plan based on the 2014/15 audit outcomes as per MFMA section 131. This was done through the quarterly OPCA PCC Engagements. In addition, advisory support was provided to refine the 15/16 audit response plans. One Municipality less due to the merger of Randfontein and Westonaria LMs into a single Entity Randwest, post the August 2016 Local Government elections. None. Number of Municipalities provided with financial support to update and maintained Infrastructure Asset Registers in line with GRAP 17 requirements. Two municipalities provided with financial support to update and maintain Infrastructure Asset Registers in line with the GRAP 17 requirements. Four municipalities provided with financial support to update and maintained Infrastructure Asset Registers in line with GRAP 17 requirements. Four municipalities were supported to update and maintain Infrastructure Asset Registers in line with GRAP 17 requirements. (Lesedi, Randfontein, Westonaria and Merafong City). None. None. 46 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

47 Sub-Programme: Municipal Finance Support Programme Name: Local Governance Sub-Programme: Municipal Finance Support Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Support and strengthen good governance; financial management and viability; the quality of institutional and administrative capacity and practice of local government institutions. Percentage of Government debt collected through the implementation of the Government debtor strategy. 75% of the total billed government debt paid. 80% of the current Government Debt collected and 40% of arrears collected. 112% of the current Government debt collected which includes the arrears amount. Gauteng CoGTA and Gauteng Treasury have established a Debt Management Committee (DMC), which supported municipalities by ensuring that National and Provincial Departments pay the debt owed to Gauteng municipalities. The split from the current and arrears could not be done due to complex municipal financial systems and allocations of collections. None. Percentage of collection on Top 500 Business Debtors. 60% collection of top 500 business debtors. 80% resolution of top 500 business debtors in local municipalities. 81% collection of top 500 business debtors. There has been an improvement in the data quality in municipalities and this has led to them being able to track the business debtors better. They also strengthen their credit control processes. None. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

48 Sub-Programme: Municipal Finance Support Programme Name: Local Governance Sub-Programme: Municipal Finance Support Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Support and strengthen good governance; financial management and viability; the quality of institutional and administrative capacity and practice of local government institutions. Number of Tariff Models customised for Municipalities. Five Tariff Models developed for five Gauteng Municipalities. Two Tariff Models developed for the Merafong and Mogale City Local Municipalities. Monitor and support the implementation of the Tariff Model in the Westonaria; Randfontein Local Municipalities and the Sedibeng Region. Two Tariff Models were developed and customised for Mogale City and Merafong Municipalities. Monitoring and support of the implementation of the Tariff Model in the Westonaria; Randfontein Local Municipalities and the Sedibeng Region was accomplished. None None Percentage resolution of billing queries in COJ. Percentage of queries resolved. 90% of COJ billing queries resolved for the year. 0 The COJ reported an achievement of 91% but the department was not able to obtain sufficient evidence to support the achievement. The department will work with the municipality to resolve this matter. 48 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

49 Sub-Programme: Municipal Institutional Support Programme Name: Local Governance Sub-Programme: Municipal Institutional Support Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Facilitate and Support Institutions of Local Government - and traditional leadership -professional functional capabilities to ascend to envisioned World Class. Number of municipalities supported to institutionalise Performance Management Systems (PMS) Number of capacity building interventions conducted. Local municipality officials mentored in respect of financial management, project and contract management financial management technical skills, built environment and governance Two municipalities (Westonaria and Randfontein) provided with financial and hands on support to cascade (level 3-5) of the Automated PMS 60 officials and councillors trained in 16 modules of a two-year municipal finance training programme (National Treasury Competency Framework). Two municipalities supported to institutionalise Performance Management System (PMS) 100 Local municipality officials mentored in project and contract management, financial management, technical skills, built environment and governance. One municipality (Rand West City) provided with financial support to automate PMS. 120 Local municipality officials were trained. The two municipalities were merged after the Local Government elections. The planned target was exceeded due to the department s commitments in the POA to train PWDs, the initial training intakes excluded PWDS and a special intervention was necessary. None. None. Facilitate and Support Institutions of Local Government - and traditional leadership -professional functional capabilities to ascend to envisioned World Class. Number of municipalities supported with implementing and institutionalising the Scarce and Critical Skills Strategy focusing on the areas of Finance; Management; Infrastructure and Oversight (S79, inclusive of MPACs). 12 Municipalities monitored and provided hands on support with the Implementation of the Scarce and Critical Skills Strategy. 12 municipalities supported with the implementing and institutionalising the Scarce and Critical Skills Strategy focusing on the areas of Finance; Management; Infrastructure and Oversight (S79, inclusive of MPACs). 11 municipalities supported with implementing and institutionalising the Scarce and Critical Skills Strategy focusing on the areas of Finance; Management; Infrastructure and Oversight (S79, inclusive of MPACs). One municipality less due to the merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections as a single municipality : RandWest City LMs. None. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

50 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Municipal Performance, Monitoring Reporting and Evaluation (Municipal Finance) Programme Name: Local Governance Sub-Programme: Municipal Performance, Monitoring Reporting and Evaluation (Municipal Finance) Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Continually monitor and evaluate CoGTA and Local Government Performance. Number of monitoring reports on municipal compliance in terms of the Municipal Finance Management Act. Six monitoring reports on municipal compliance in terms of section 16; 71; 131 and 132 of the Municipal Finance Management Act. Three reports on municipal compliance in terms of the Municipal Finance Management Act (MFMA). Three reports on municipal compliance in terms of the Municipal Finance Management Act (MFMA). None. None. Number of monitoring reports on DoRA grants expenditure and municipal unauthorised; irregular; fruitless and wasteful expenditure reported. New Indicator. Four monitoring reports on DoRA grants expenditure and municipal unauthorised; irregular; fruitless and wasteful expenditure reported. Four monitoring reports on DoRA grants expenditure and municipal unauthorised; irregular; fruitless and wasteful expenditure reported. None. None. Number of municipalities with functional audit committees. Four monitoring report on the functionality of 12 municipal audit committees and internal audit units. 12 municipalities with functional audit committees. 11 municipalities with functional audit committees. One municipality less due to the merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections as a single municipality : RandWest City LMs. None. Number of municipalities that are compliant with the Municipal Property Rates Act. 10 municipalities guided to comply with the Municipal Property Rates Act. 10 municipalities that are compliant with the Municipal Property Rates Act. 10 municipalities that are compliant with the Municipal Property Rates Act. None. None. Number of monitoring reports on the functionality of the Valuation Appeals Boards (VABs). New Indicator. Four monitoring reports on the functionality of the Valuation Appeals Boards (VABs). Four monitoring reports on the functionality of the Valuation Appeals Boards (VABs). None. None. 50 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

51 Sub-Programme: Municipal Performance, Monitoring Reporting and Evaluation (Municipal Finance) Programme Name: Local Governance Sub-Programme: Municipal Performance, Monitoring Reporting and Evaluation (Municipal Finance) Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Continually monitor and evaluate CoGTA and Local Government Performance. Number of municipalities complying with Annual National Gazette on the Determination of Upper Limits for Municipal Councillors in terms of Remuneration of Public Office Bearers Act. 13 monitoring reports on the implementation of the National Gazette on the determination of upper limits for municipal councillors and in terms of Remuneration of Public Office Bearers Act. 12 municipalities complying with Annual National Gazette on the Determination of Upper Limits for Municipal Councillors in terms of Remuneration of Public Office Bearers Act. Eight municipalities complied with Annual National Gazette on the Determination of Upper Limits for Municipal Councillors in terms of Remuneration of Public Office Bearers Act. Three municipalities (Mogale, Tshwane and Johannesburg) have not applied to the MEC for concurrence to implement the Government Gazette No of 21 December These municipalities rejected the 15% contribution towards pension. The National Department of Co-operative Governance has since issued a revised Gazette in April 2017 to address issues and challenges raised by municipalities. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

52 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Municipal Performance, Monitoring Reporting and Evaluation (Service Delivery) Programme Name: Local Governance Sub-Programme: Municipal Performance, Monitoring Reporting and Evaluation (Service Delivery) Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Continually monitor and evaluate CoGTA and Local Government Performance. Number of reports on municipal performance and compliance with Municipal System Act 2011 as amended and its regulations. New Indicator. Four reports on municipal performance and compliance with Municipal System Act 2011 as amended and its regulations. Four reports on municipal performance and compliance with Municipal System Act 2011 as amended and its regulations. None. None. Number of reports on municipal performance against Transformation, Modernisation and Revitalisation programme and corridors of development. New Indicator. Four reports on municipal performance against Transformation, Modernisation and Revitalisation programme and corridors of development. Four reports on municipal performance against Transformation, Modernisation and Revitalisation programme and corridors of development. None. None. 1 annual municipal performance report compiled as per the requirements of Section 47 of the Municipal System Act (MSA). One annual municipal performance report for 2014/15 compiled as One annual municipal performance report for 2015/16 compiled as per the requirements of Section 47 of the Municipal System Act (MSA). One annual municipal performance report for 2015/16 compiled as per the requirements of Section 47 of the Municipal System Act (MSA). None. None. 52 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

53 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Gender, Youth and People with Disability (GEYODI) Programme Name: Local Governance Sub-Programme: Gender, Youth and People with Disability (GEYODI) Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Continually monitor and evaluate CoGTA and Local Government Performance. Number of women councillors trained and having successfully achieved course objectives on GEYODI. 50 women councillors trained (demand driven). Induction programme for 50 women councillors on GEYODI. 44 women councillors were trained on GEYODI. Six women councillors were not able to complete all the course objectives due to competing priorities. The department is going to make councillors who have confirmed that they will attend training to sign an agreement to pay the department back for the costs incurred should they not attend or complete the course. Number of municipalities with disability Management strategies in place. New Indicator. Three municipalities with disability strategies in place. One municipal GEYODI programme of action and Disability strategy was developed and three municipalities were supported to develop disability strategies. The department developed a Municipal GEYODI programme of action and Disability strategy in order to have a benchmark document that can be used by municipalities. None. Number of municipalities meeting the 2% disability employment target. New Indicator. Three municipalities meeting the 2% disability employment target. The three municipalities profiled did not meet the 2% disability target. The municipalities were not able to attract enough people with disabilities to meet the 2% target The department will continue to support municipalities to assist them to reach the 2% target Number of Gauteng department bursaries awarded to suitable persons with disabilities as part of the TMR objectives. New Indicator. Five Gauteng department bursaries awarded to suitable persons with disabilities as part of the TMR objectives. Five Gauteng department bursaries awarded to suitable persons with disabilities as part of the TMR objectives. None. None. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

54 Provide reasons for deviations Reasons for deviations Three municipalities had not applied to the MEC for concurrence to implement the Government Gazette No of 21 December These municipalities had raised implementation challenges regarding this Gazette. Three municipalities had not finalised their Ward Committee establishment. Strategy to overcome areas of under performance The National Department of Co-operative Governance has since issued a revised Gazette in April 2017 to address issues and challenges raised by municipalities so that all municipalities should comply with the Annual Gazette in this financial year. The three municipalities that had not finalised their Ward Committee establishment have planned to complete the establishment by May Changes to planned targets The department did not change performance indicators or planned targets during the reporting period. Linking performance with budgets The programme was allocated a total budget of R million during the reporting period of which R i.e. 97% was spent during the same period. Although 3% under expenditure is considered insignificant, it represents about R6, 3 million. This amount was not spent, as result of delays in the acquisition of the tools of trade for Community Development Workers. Sub-programme expenditure Local Governance 2015/ /2017 Final Appropriation Expenditure (Over)/Under Expenditure Final Appropriation Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Municipal Administration (431) Municipal Finance Public Participation Capacity Development Municipal Performance Monitoring, Reporting and Evaluation TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

55 3.3. Programme 3: DEVELOPMENT AND PLANNING Purpose of the Programme This programme seeks to coordinate, facilitate and promote integrated development and planning in municipalities to ensure that varieties of services are delivered in an integrated and sustainable manner. It facilitates and coordinates processes towards ensuring the municipal IDPs are credible, implementable, and aligned to national and provincial outcomes, plans and strategies. It also ensures strategic management of provincial land for economic and social purposes. Coordination and support is provided to Municipalities for the implementation of the National Disaster Management Act and framework to ensure the effective management of disaster at National, provincial and local level within this programme. In addition, it also ensures the accelerated delivery of municipal basic service and infrastructure delivery to meet national targets. Sub-Programme Integrated Development Coordination (IDP) Infrastructure Technical Support Energy Disaster Management Strategic Objectives for the year under review Create/set the standard for optimal functioning of a capable local government. Enhance good governance. Facilitate and support institutions of Local Government and traditional leadership with professional and functional capabilities to ascend to envisioned world class. Key Achievements In supporting municipalities to be legally compliant in the development of the IDP, the department developed an analysis report on draft IDPs with inputs received from sector Departments and distributed to municipalities for factoring into the final IDPs. Analysis report on draft IDPs from all municipalities; all municipalities with IDPs aligned to the Integrated Urban Development Framework (IUDF) - in conjunction with the Department of Economic Development and Gauteng Planning Division. A joint session was held with Municipalities and GPG to monitor progress of Municipal alignment to TMR and B2B 10-Point Plan. The implementation of the Water Conservation/Water Demand Management (WC/WDM) is being supported through the installation of rainwater harvesting systems in 63 schools. The DWS- Minister launched the Eastern Basin Treatment works during this financial year in Springs. The Works in the Eastern, Central and Western Basins are all operational, pumping and neutralising on average 86, 72 and 30 million litres AMD per day, respectively. The implementation of WC/WDM is being supported through the installation of rainwater harvesting systems in schools and Acid Mine Drainage (AMD) interventions are being provided through the three AMD Treatment plants built by the Department of Water Affairs (DWS). Decanting has stopped and is being continuously monitored Jobs were created to meet the targets of the Community Works Programme (CWP). Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

56 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Integrated Development Coordination (IDP) Programme Name: Development and Planning Sub-Programme: Integrated Development Coordination (IDP) Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Create/set the Standard for Optimal Functioning of a capable local government. Number of municipalities supported with development of legally compliant IDP. One analysis report on draft IDPs. Analysis of Final IDPs 12 MEC commenting Letters State of The IDPs report. One analysis report on draft IDPs submitted. 12 MEC analysis letters on final IDPs. One Consolidated Analysis Report on Municipal IDPs submitted. Analysis of Final IDPs and 11 MEC commenting Letters State of The IDPs report finalised. None. None. None. None. State of The IDPs report. State of The IDPs report. State of The IDPs report finalised. None. None. Number of municipalities with a detailed 5-year IDP aligned with TMR objectives which is underpinned by the B2B Phase point plan to move to a GCR and high level 10- and 15-year plans. New Indicator. 11 Municipalities submitting detailed 5-year IDP aligned with TMR objectives which is underpinned by the B2B Phase point plan to move to a GCR and high level 10- and 15-year plans. 11 Municipalities submitting detailed 5-year IDP aligned with TMR objectives which is underpinned by the B2B Phase point plan to move to a GCR and high level 10- and 15-year plans. One municipality less due to the merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections into a single municipality: RandWest City LMs. None. Number of municipalities with IDPs aligned to the Integrated Urban Development Framework (IUDF) - in conjunction with Department of Economic Development and GPD. New Indicator. 11 municipalities with IDPs aligned to the Integrated Urban Development Framework (IUDF) - in conjunction with Department of Economic Development and GPD. 11 municipalities with IDPs aligned to the Integrated Urban Development Framework (IUDF) - in conjunction with Department of Economic Development and GPD. One municipality less due to the merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections into a single municipality: RandWest City LMs. None. 56 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

57 Sub-Programme: Integrated Development Coordination (IDP) Programme Name: Development and Planning Sub-Programme: Integrated Development Coordination (IDP) Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Enhance Good Governance. State of readiness of the West Rand District Municipality to submit 4 IDPs after the merger of Randfontein and Westonaria. Provide technical support to Randfontein and Westonaria The Draft Rand -West City 2016\17 and 2017\18 IDPs were submitted Support was provided to Rand- West City and the draft 2016\17 and 2017\18 IDPs were submitted. None. None. Number of IDP Technical Steering Committee engagements with Gauteng Sector Departments. New Indicator. Three Technical Steering Committee Engagements with Gauteng Sector Departments. Four Technical Steering Committee Engagements with Gauteng Sector Departments were held. The additional engagement was requested by the sector departments due to provincial priorities. None. New Indicator. Five regional engagements with municipalities. Five regional engagements were held with municipalities. None None Number of municipal Councillors and officials to receive IDP training Participants to receive IDP training (Municipal Councillors). IDP Training for 85 Councillors and Officials (CDWs) was rolled out. The department invited 100 participants and confirmed attendance, 85 councillors and officials attended the training. A circular will be sent to the Speaker s Office to address the issue of nonattendance by Councillors. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

58 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Infrastructure Technical Support Programme Name: Development and Planning Sub-Programme: Infrastructure Technical Support Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Facilitate and Support Institutions of Local Government and traditional leadership with professional and functional capabilities to ascend to envisioned World Class. Number of municipalities with approved support plan for Human Settlement mega projects with requisite bulk infrastructure funding. Number of municipalities assessed against service delivery benchmarks. New Indicator. 12 Municipalities assessed against service delivery benchmarks. 12 municipalities with approved support plan for Human Settlement mega projects with requisite bulk infrastructure funding. 12 Municipalities assessed against service delivery benchmarks. 11 municipalities with approved support plan for Human Settlement mega projects with requisite bulk infrastructure funding. 9 Municipalities assessed against service delivery benchmarks. One municipality less due to the merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections into a single municipality: RandWest City LMs. One municipality less due to the merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections into a single municipality: RandWest City LMs. None. None. Number of functional coordinating structures for infrastructure development and service delivery. Four functional coordinating structures for infrastructure development and service delivery. Four functional coordinating structures for infrastructure development and service delivery. Four functional coordinating structures for infrastructure development and service delivery. None. None. Percentage expenditure of allocated Municipal Infrastructure Grant (MIG) Programme for 7 municipalities by the end of the municipal financial year. 100% expenditure of R 473,420 million on Grant funded projects by municipalities. 100% expenditure of R 492,000 million on Grant funded projects by municipalities. Expenditure is currently at R244, 248 million translating to 54% of total funds allocated (R448, 801 mil) up to the end of March 2017 for 2016/17 FY. The merger of Randfontein and Westonaria municipalities, which took place after the municipal elections delayed the MIG allocation until around December 2016 and this has led to the under expenditure. CoGTA will provide support to the merged municipality to speed up the implementation of their projects. 58 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

59 Sub-Programme: Infrastructure Technical Support Programme Name: Development and Planning Sub-Programme: Infrastructure Technical Support Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Facilitate and Support Institutions of Local Government and traditional leadership with professional and functional capabilities to ascend to envisioned World Class. Percentage of municipalities showing a reduction of Water losses by 15%. Facilitate and monitor the implementation of WC/WDM Strategy to reduce water losses by 3.7%. 50% of municipalities showing a reduction of water losses by 15% 50% of municipalities showing a reduction of water losses by 34%: COJ % ; Ekurhuleni -28%; CoT- 28.4%; Midvaal %; RandWest LM - 15%; Emfuleni LM %; Merafong LM % Mogale City LM - 33% Lesedi LM % None. None. Number of municipalities implementing the Gauteng water and sanitation management plan. 10 municipalities monitored to implement the Gauteng Water and Sanitation Plan. Gauteng water and sanitation management plan developed and implemented by all municipalities. The implementation of the WC/WDM is being supported through installation of rainwater harvesting systems in 63 schools. The DWS- Minister launched the eastern basin treatment works on 17th February 2017 in Springs. The Works in the Eastern, Central and Western Basins are all operational, pumping and neutralising on average 86, 72 and 30 million litres AMD per day, respectively. None. None. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

60 Sub-Programme: Infrastructure Technical Support Programme Name: Development and Planning Sub-Programme: Infrastructure Technical Support Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Facilitate and Support Institutions of Local Government and traditional leadership with professional and functional capabilities to ascend to envisioned World Class. Number of municipalities supported to implement indigent policies (Sub-outcome 1, Action 6). Job creation efforts in meeting the targets of the Tshepo initiatives. 10 municipalities supported to implement indigent policies (sub-outcome 1 Action 6). 10 municipalities supported to implement indigent policies (sub-outcome 1 Action 6). New Indicator. 750 Job creation efforts in meeting the targets of the Tshepo initiatives. 10 municipalities supported to implement indigent policies (sub-outcome 1 Action 6). None. 0 Placement of apprentices Experiential training for Artisanship in municipalities is slow due to pre-requisite conditions for placement. There were therefore no placements made. None. A dedicated resource has been appointed on contract to run this project. Job creation efforts in meeting the targets of the Community Works Programme (CWP). New Indicator Job creation efforts in meeting the targets of the Community Works Programme (CWP) jobs were created in meeting the targets of the Community Works Programme (CWP). The over achievement is because of the programme allowing 10% additional participants at each site. None. 60 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

61 Sub-Programme: Energy Office Programme Name: Development and Planning Sub-Programme: Energy Office Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Facilitate and Support Institutions of Local Government and traditional leadership with professional and functional capabilities to ascend to envisioned World Class. Number of municipalities with target percentage of 92% of households on electricity. New Indicator 10 municipalities with target percentage of 92% of households on electricity. Nine municipalities gained 92.22% access to electricity at the end of the year ( households) One municipality less due to the merger of Randfontein and Westonaria LMs after the 3 August 2016 Local government elections into a single municipality: RandWest City LMs. None. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

62 Sub-Programme: Disaster Management Programme Name: Development and Planning Sub-Programme: Disaster Management Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Facilitate and Support Institutions of Local Government and traditional leadership with professional and functional capabilities to ascend to envisioned World Class local government. Number of functional Municipal Disaster Management Centres. Five functional municipal Disaster Management Centres. Five functional Municipal Disaster Management Centres. Five Municipal Disaster Management Centres were functional. None. None. Number of Municipalities complying with Disaster Management Legislative Requirements. New Indicator. One Municipality complying with Disaster Management Legislative Requirements. One Municipality (Sedibeng) complying with the Disaster Management Legislative Requirements. None. None. 62 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

63 Reasons for deviation One municipality, due to the merger of Randfontein and Westonaria Local Municipalities after the 3 August 2016 Local government elections as a single municipality: RandWest LMs. The department invited 100 participants and confirmed attendance, 85 councillors and officials attended the training. There was a delay to transfer funds to Rand West City due to the merging of the municipalities, which took place after the municipal election in August Placement of apprentices (Experiential training for Artisanship) in municipalities is slow due to pre-requisite conditions for placement. The placement has also been moved to Rand Water by DWS. Strategy to overcome areas of under performance Relax some of the conditions (e.g. number of apprentices placed against qualified artisans) and facilitate process through Municipal Manager s office. Consultation with the Speaker s Office to be conducted during the planning phase with regard to the participants that are nominated for training. Support the merged municipalities to speed up the implementation of projects and to spend the allocated Municipal Infrastructure Grant funding. Changes to planned targets The department did not change performance indicators or planned targets during the reporting period. Linking performance with budgets The programme was allocated a budget of R million and an amount of R million i.e. 72% was spent. This was the least spending programme during the reporting period; an amount of R 50 million could not be spent, due to the following reasons: 1. An additional R40 million was allocated during the adjustment budget period or October 2016 and as a result of necessary procurement processes the actual projects were implemented late in the reporting period. 2. The Department experienced difficulties in securing land to locate the victims of floods that took place in December 2016 and January 2017 and as a result, the Department could not take delivery of the temporary accommodation facilities. The Department will apply for the funds to be rolled-over to the next financial year and continue with the relevant projects. Sub-programme expenditure Development Planning Final Appropriation 2015/ /2017 (Over)/Under Final Expenditure Expenditure Appropriation Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Land Use Management IDP Coordination Disaster Management Municipal Infrastructure TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

64 3.4. Programme 4: TRADITIONAL INSTITUTION MANAGEMENT Purpose of the Programme The function of this programme is to promote and facilitate viable and sustainable traditional institutions and to support and enhance the capacity of traditional leadership and local governance institutions. The key performance areas are Traditional Institutional Administration, Traditional Resource Administration, Rural Development Facilitation and Traditional Land Administration. Sub-Programme Traditional Institution Administration Strategic Objectives for the financial year under review To improve the developmental and governance capacity, quality of management and administrative practices within Traditional Leadership. Facilitate and Support Institutions of Local Government and traditional leadership with professional and functional capabilities to ascend to envisioned World Class. Key Achievements King Zwelithini Primary School The Traditional Leadership and Governance Framework Act, No 41 of 2003 was enacted to give effect to Chapter 12 of the Constitution and one of the objectives of the Framework Act is to restore the dignity of the institution of traditional leadership. The institution of traditional leadership is responsible for protecting culture. During this reporting period, the Department was informed of the visit of His Majesty King Goodwill Zwelithini for the naming ceremony of the King Zwelithini Primary School. In partnership with the Office of the Premier and the Department of Education, the Department offered technical and financial support to host His Majesty on the 3rd March Support to the Komjekejeke Heritage Event The Kingdom of His Majesty King Makhosonke II annually hosts an event to commemorate the late King Silamba in Walmansthal, in the City of Tshwane. The site is a recognised heritage site where Ndebele traditional communities from all provinces come to celebrate their heritage and customs. The Department provided technical and financial assistance in partnership with the City of Tshwane and the Department of Co-operative Governance and Traditional Affairs in Mpumalanga. The event celebrates the cultural heritage of the Ndebele Nation and is an opportunity to promote social cohesion. This year, the event attracted representatives from Southern African Development Community (SADC) region (Zimbabwe, Mozambique, Zambia, Swaziland and DRC), the Deputy Minister for Arts and Culture Honourable Rejoice Mabudafhasi, Speaker of the National Legislature Honourable Baleka Mbete, kings from the Eastern Cape Province, traditional leaders from Limpopo, Mpumalanga, North West and Gauteng Province, the kings councils from Mpumalanga and officials from the North West, Mpumalanga and Gauteng. The following messages were highlighted during the event: To strengthen the relationship with other African states by embracing each other and prevent xenophobia since we are all Africans, To provide a platform for Traditional Leaders and their communities, as custodians of customs and culture, to promote the importance of culture and heritage, To afford the Ndebele Kingdom and its communities to tell its history and to shape the future of the community both in relation to its culture and human development. 64 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

65 Reviving traditional ways, norms and values which are rarely celebrated and to spread them throughout the nation and African states. To ensure that the Ndebele Kingdom formalises the relationship started with the University of Venda to enable the Ndebele language to be introduced at the University and for a thorough research about the Ndebele nation. Promote the important role played by observing cultural practices and thereby contributing to the revival of morality. To promote social cohesion and moral regeneration in and amongst the whole Africa. To ensure that Government takes responsibility to support and treat all Traditional Leaders equally. To also ensure that government takes responsibility of all government and Traditional Communities infrastructure investments in the areas of Traditional Leaders by providing resources for the operations and maintenance of those infrastructures. To promote and empower local artists, indigenous knowledge systems and the traditional practices by all the Ndebele people, including traditional Initiation. The Customary Practice of Initiation During the current reporting period, the Department coordinated the Provincial Technical Task Team on the customary practice of initiation. At the start of the winter and summer initiation season, the Department held an awareness campaign in partnership with the Sedibeng District Municipality. The Sedibeng District Municipality was targeted because of the numerous challenges experienced in the district. The campaign aimed to outline the criteria and approval process for hosting initiation schools. The following table is a report for the winter initiation season: Municipality No. Of I/S Registered No. Of Initiates No. Of Illegal/S No. Of Abduction No. Of Rescued Children (Initiates) No. Of Fatalities Reported No. Of Cases Referred To The Hospital/ Admitted COT COJ EMM WRDM SDM admitted at Heidelberg Hospital The following table outlines the statistical report for the summer initiation season and it must be noted that no fatalities were recorded during this period: Municipality No. Of I/S Registered. No. Applications I/S Received No. Of Applications Approved No. Of Illegal I/S Recorded/ No. Abducted Children Closed COJ Nil Nil Nil Nil Nil EMM Nil Nil Nil Nil Nil SDM Nil Nil Nil COT Nil Nil Nil Nil Nil WRDM Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

66 Strategic objectives, performance indicators, planned targets and actual achievements Sub-Programme: Traditional Institutional Management Programme Name: Development and Planning Sub-Programme: Traditional Institutional Management Strategic objectives Performance Indicator Achievement 2015/2016 Planned Target 2016/2017 Achievement 2016/2017 Deviation from planned target to Achievement for 2016/2017 Comment on deviations Facilitate and Support Institutions of Local Government and traditional leadership with professional and functional capabilities to ascend to envisioned World Class. Number of reports on implementation of Presidential Proclamations in terms of the Remuneration of Public Office Bearers Act (POBA). 1 Annual Report prepared on the implementation of the Presidential Proclamation in terms of the Remuneration of Public Office Bearers Act. 1 Annual Report prepared on the implementation of the Presidential Proclamation in terms of the Remuneration of Public Office Bearers Act. 1 Annual Report prepared on the implementation of the Presidential Proclamation in terms of the Remuneration of Public Office Bearers Act. None. None. Number of Traditional Councils complying with Legislative prescripts. 2 Traditional Councils complying with Legislative prescripts. 2 Traditional Councils complying with Legislative prescripts. 2 Traditional Councils complying with Legislative prescripts. None. None. To improve the developmental and governance capacity, quality of management and administrative practices within Traditional Leadership. Percentage of traditional leadership complaints resolved within 90 days after date of receipt. New Indicator. 60% of traditional leadership complaints resolved within 90 days after the date of receipt. 100% of complaints received were resolved. The one complaint received from the AmaNdebele A Moletlane was responded to within the stipulated timeframe. None. None. 66 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

67 Changes to planned targets The department did not change performance indicators or planned targets during the reporting period. Linking performance with budgets This programme had a least budget allocation of R million of which R million i.e. 97% was spent. The allocation was not fully dispersed due to non-allocation of funds to one Traditional Council due outstanding financial reports. Sub-programme expenditure Traditional Institutional Management Final Appropriation 2015/ /2017 (Over)/Under Final Expenditure Expenditure Appropriation Expenditure (Over)/Under Expenditure R 000 R 000 R 000 R 000 R 000 R 000 Traditional Inst Admin (342) Traditional Resource Admin Rural Development Facilitation Traditional Land Admin TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

68 4. TRANSFER PAYMENTS 4.1. Transfer payments to public entities Public entities receive sizeable transfer payments from government and are often the front-line providers of services on behalf of government. It is therefore important to understand the impact of these services on the community. Departments are requested to provide information on the services provided by these public entities, transfer payments to the public entities, the actual amount spent from the transfer received by the public entities, strategic achievements of the public entity. Departments must also comment on monthly monitoring systems or the lack thereof to monitor spending on such transfer payments. If such monitoring did take place, departments must provide details of difficulties experienced and what steps (if any) were taken to rectify such difficulties. Name of Public Entity Services rendered by the public entity Amount transferred to the public entity Amount spent by the public entity Achievements of the public entity None Transfer payments to all organisations other than public entities This section provides information on transfer payments made to provinces, municipalities, departmental agencies (excl. public entities), higher education institutions, public corporations, private enterprises, foreign governments, non-profit institutions and households. This excludes payments to public entities, as it is included in the previous section. In this section also provide information on where funds were budgeted to be transferred but transfers were not made and the reasons for not transferring funds. Departments are requested to provide the name of the transferee, the purpose for which these funds were transferred, did the department comply with S38 1(j), the amount transferred, the amount spent from the transfer received by the transferee, (excluding individuals or social grant payments) and the reasons for unspent funds by the transferee. Departments must also comment on monthly monitoring systems or the lack thereof to monitor spending on such transfers. If such monitoring did take place, departments must provide details of difficulties experienced and what steps (if any) were taken to rectify such difficulties. 68 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

69 The table below reflects the transfer payments made for the period 1 April 2016 to 31 March 2017 Name of transferee Type of organisation Purpose for which the funds were used Did the dept. comply with s 38 (1) (j) of the PFMA Amount transferred (R 000) Amount spent by the entity Reasons for the funds unspent by the entity Westonaria LM Municipality GRAP 17 YES R 500 R Randfontein L M Municipality GRAP 17 YES R 500 R Merafong L. M Municipality GRAP 17 YES R R Lesedi LM Municipality GRAP 17 YES R R Emfuleni LM Municipality Water YES R3 384 R 0 - Infrastructure RandWest LM Municipality PMS YES R R Merafong LM Municipality EPWP YES R 500 R Lesedi LM Municipality EPWP YES R 500 R Westonaria LM Municipality EPWP YES R 500 R RandWest LM Municipality EPWP YES R 500 R Emfuleni LM Municipality New waste water pump station RandWest LM Municipality Electricity Infrastructure YES R R 0 - YES R R Merafong LM Municipality Water Tankers YES R 5 00 R 0 - RandWest LM Municipality Transformation YES R R West Rand District LM Municipality Transformation YES R R Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

70 PART C GOVERNANCE 70 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

71 1. INTRODUCTION The Department of Co-operative Governance and Traditional Affairs has adopted an Enterprise Wide Risk Management System, and its adoption marked a transition from a relatively immature risk management system into a more mature system with a clear allocation of responsibilities across the Risk Management Committee, management and employees. The department recognises risk management as an integral part of processes and this is outlined in the Risk Management Framework as well as in the policy and procedures. The department is committed to an enterprise-wide risk management process, in accordance with the provisions of the Public Finance Management Act (PFMA), Act 1 of 1999 and other prescripts of good governance, such as the King III Report on Corporate Governance for South Africa 2009, to ensure maintenance of effective, efficient and transparent systems of financial and internal controls. 2. RISK MANAGEMENT During the reporting period, the department continued to build on the solid risk management foundation, which, among others includes: Strengthening the risk maturity within the entity at all levels by embedding the organisation s risk management culture; Reviewing the Enterprise Risk Management Strategy and Risk Management policy, which were developed in line with the PFMA and other relevant prescripts and guided how risks should be managed within the department. The Enterprise Risk Management Strategy adopted by the department supports the department in improving and sustaining its performance by enhancing its systems of risk management to protect against adverse outcomes and optimise opportunities. This strategy was applied across the entire department from a strategic level down to operational and business process levels; Regular assessments were performed to determine the effectiveness of the risk management strategy and to identify emerging risks; Updating risk registers for all units within the department, with measurable management action plans and completion dates; Rigorous, continuous monitoring of the Enterprise risk management implementation plans; Reporting on a bottom-up approach through each Directorate i.e., as each risk was identified, it was allocated to a relevant person in the respective Directorate responsible for the day-to-day management thereof and recorded in a risk register that contained the descriptions, causes, control in place, assessments and mitigating actions of all risks identified; Continuous risk management awareness campaigns; Reviewing the Business Continuity Plan; The Department had a functional Risk Management Committee that advised management on the overall system of risk management, especially the mitigation of unacceptable risks to an acceptable level. The committee comprised of an independent Chairperson, the Accounting Officer, all Deputy Director Generals and all Chief Directors; and Despite improvement identified in the department risk management system, management acknowledges that there are areas that still require improvement and strengthening for the department to reach the desired mature risk management system. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

72 3. FRAUD AND CORRUPTION The Department conducted a fraud risk assessment for the reporting period and an approved Fraud Prevention Plan (FPP), a FPP Implementation Plan was thus developed to address all fraud risk areas, which were identified during the assessment. Fraud prevention and Anti-Corruption awareness Campaign were conducted to sensitise staff on fraud prevention and anti-corruption. Cases of fraud and corruption are reported via the National Anti-Corruption Hotline, while others are also reported via the Premier s Hotline and in rare instances, cases are also reported internally to the Office of the Chief Risk Officer. Allegations of fraud and corruption are referred Gauteng Department of Treasury for investigations and appropriate actions taken based on the recommendations of the reports. 4. MINIMISING CONFLICT OF INTEREST The Department implemented a specific request form and a comprehensive schedule to ensure that SCM practitioners declare their interests in particular companies. This was additional to the Standard bidding documentation that required the service providers to declare their interest and knowledge of department officials that are or could be involved in the respective procurement process. 5. CODE OF CONDUCT The department is implementing the Public Service Code of Conduct as applicable in the enter Public Service. The Codes form part of CoGTA s internal induction programme. Every employee receives a copy of the same, and accordingly accepts and binds his or herself to the Code. All newly appointed employees were inducted on the contents of the Code of Conduct. The explanatory manual was also availed for employees in the reporting year. CoGTA follows the process as outlined in the Disciplinary Code and Procedures as per Resolution 01 of 2003 in cases of any breach of the Code of Conduct. During the relevant year, all reported cases were dealt with in terms of the said Code. 6. HEALTH SAFETY AND ENVIRONMENTAL ISSUES The Department of Co-operative Governance and Traditional Affairs is currently sharing the building with other three departments. The building is under control of the Department of Infrastructure Development, as the custodian of all government buildings. The anomaly of this state of events is such that COGTA cannot exercise full control of health and safety measures. The safety issues of the buildings experienced during the reporting year include poorly maintained lifts, inadequate air conditioning, and poorly maintained water and ablution facilities. More often than not, construction is conducted during office hours, making the working environment unsafe. This sharing arrangements and dependency also affects the ability of the department to make sufficient provisions for persons living with disabilities. 72 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

73 7. PORTFOLIO COMMITTEES Date of the Meeting Question Asked Response by the department Committee Resolutions on the 3 rd Quarterly Report 2015/16 29 April 2016 The Department should continue to engage the Department of Infrastructure in terms of acquiring a separate building. The Department has been continuously engaging with DID as a result commitment has been made by DID for the Department to occupy the Bank of Lisbon Building once the Department of Health has vacated the building. The Department should ensure that the critical vacancies are filled and this should be reported to the Portfolio Committee on a quarterly basis. The Department has addressed the issue of critical posts with management vacancy now sitting at 4 positions, only due to exits. It must however be noted that full scale recruitment drive at all others levels has a dependence on the availability of office accommodation. The Budget Vote (7) Report of Department of Co-Operative Governance for the 2016/ May 2016 The Department should speed up the process of attaining a building that will accommodate the Department, noting that CoGTA is still located with two massive Departments in one space (Health and Human Settlement). The Department of Infrastructure Development is in the process of relocating the Department of Health out of the Bank of Lisbon to 11 Diagonal Street. The Department of Co-operative Governance and Traditional Affairs will then occupy the space in the Building currently occupied by Health. The process is envisaged to be finalised by November There is no need at this stage for the Department to acquire its own building. The Department should ensure that the training of 50 new Women Councillors is provided in all 12 Municipalities, within six months after the Local Government elections. The planning process for the training of 50 new women councillors has started in the department. The terms of reference for this training have been completed and the training will take place within six months after the local government elections in line with the House resolution. The Department should provide the Portfolio Committee with reasons related to the late appointment of the service provider as this resulted to a non- achievement of the budgeted target of providing IDP Education and Training of 60 participants. The following are the key reasons that impeded the implementation of the IDP Education and Training Programme: The awarding of the training and Education Service to the Development Bank of Southern Africa (DBSA) as the preferred service provider was deemed a breach of the Department s procurement standards. Against that backdrop, the Department s Legal Services Division recommended that the IDP training be advertised on open tender terms. The route of advertising the IDP training on open tender could, at the time of the recommendation, no longer be pursued due to time constraints. Pursuant to the delay, the 2015/16 IDP education and training programme could not be implemented. The Department should ensure that the PDMC is up and running before end of the financial year (2016/17) and is responsive to disaster management issues that might hinder the Gauteng Province. The Department of Infrastructure Development (DID) has entered into a 3 year lease on behalf of the Department of Co-operative Governance and Traditional Affairs (CoGTA) for a building in Midrand. DID has finalised the negotiations to procure the same building (i.e. outright purchase). CoGTA is in negotiations with SITA and other state owned entities for the supply of ICT Hardware The Department is further in the process of appointing employees on a contract whilst finalising the process of the approval of the new organogram for the PDMC. The PDMC is in the process of aligning its self to the Disaster Management Amendment Act 16 of 2015 by ensuring that the Disaster Management Framework and level 1 Plan are updated accordingly. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

74 Date of the Meeting Question Asked Response by the department Committee Resolutions on the 3 rd Quarterly Report 2015/16 30 September 2016 The Department should provide the reasons related to underspending for each of the programmes (Administration, Local Governance, Development and Planning and Traditional Institutional Development)? How the Department exceeded its quarterly budget through Compensation of Employees because it had nothing planned for the 1st quarter of the 2016/17 FY? Noting the underspending reported above, what is the amount of work that has been carried out during the quarter under review? How confident is the Department in that they will achieve the planned outputs in terms of Goods and Services? The Department did not reach the expected 25% expenditure on the above mentioned programmes due to the following reasons: The allocation for goods and service was not sufficiently spent due to procurement, which started at the beginning of the quarter and was concluded only at the end of the quarter; however, the actual goods or services were not delivered or completely delivered by the end of the quarter. The poor level of expenditure in Development Planning was because of a huge allocation intended for the development of the PDMC. During the reporting period, the negotiations of the contract to acquire the building for the centre were underway and were only concluded at the end of the quarter. Payments will only take place during the second quarter. Otherwise, there were no targeted deliverables during the same period and as a result, no funds were spent. The standard practice is that expenditure must be at 25%. A variation of 5% below/above is allowed, but nothing less/more. The expenditure of the Department during the quarter under review was 24%, which is within the standard norm. Moreover, the expenditure on compensation reflects a number or percentage of vacancies filled. During the reporting period, the Department filled a number of vacancies on temporary basis or on contract. Yes, kindly refer to the performance reports, which indicate performance up to 91% in some programmes. As mentioned above procurement on some of the key programmes were concluded at the end of the quarter, it is expected that expenditure from the relevant contracts will reflect in the expenditure of the ensuing quarters. Based on that, the Department is confident that expenditure on goods and service will improve in the next three quarters. Second Quarterly Report of the Department of Co-Operative Governance and Traditional Affairs For 2016/17 Financial Year 29 November 2016 The Department should curb over expenditure in the quarters of the 2016/17 to avoid fiscal dumping. Although the third quarter indicate an improvement in expenditure, there was no over expenditure during the quarter in question. The Department further undertook not to commit any fiscal dumping; any transfer to the municipalities will be done in accordance with the provisions of Division of Revenue Act and Public Finance Management Act. The Department should link the budget with the performance indicators to avoid under or over expenditure in all remaining quarters of the 2016/17 financial year. The Department has had a performance review with the senior management where areas of underachievement were discussed and solutions were brought forward. The Strategic Planning Unit is having one-on-one meetings with the branches to identify areas that could be a challenge before the quarter ends so that interventions can be sought before the quarter ends. 74 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

75 Date of the Meeting Question Asked Response by the department Committee Resolutions on the 3 rd Quarterly Report 2015/16 29 November 2016 The Department should intervene in addressing aging infrastructure. The Department has identified together with municipalities aging infrastructure that needs to be replaced. Some municipalities are gradually undertaking replacement programmes, however the funding for these programmes is not adequate to address the aging infrastructure at a pace required to avert service delivery failures. The Department should exercise its authority to ensure that municipalities comply in terms of reducing water losses noting the draught that is affecting not only Gauteng but the The Department has constituted a water management JOC that convenes every week to monitor and enforce compliance to 15% water reduction set to protect the available water resources. There are also technical committees that focus on communication and actual technical interventions in the water supply system aimed at addressing the reduction in consumption to meet the target. The Department has to ensure that MIGs are channelled to address decayed infrastructure on the affected municipalities and report on the financial information. MIG funding policy is mainly intended to provide new services infrastructure with limited amounts allocated to refurbishment and replacement. The MIGs allocation to municipalities is not enough to cover both new infrastructure and the programmes for the replacement of aging infrastructure adequately. Thus, aging infrastructure can be only addressed in the medium to long term due to quantities of infrastructure to be replaced. Strengthen support to municipalities to improve the MIG expenditure and to realise key service delivery infrastructure programmes. The Department continues to support municipalities both financially and through technical hands on support. Additional human resources in engineering are provided to assist with project planning, programme, project management, project tender documentation/ specifications compilation including tender evaluation reports. Proposed Questions Emanating from the 3 rd Quarter Analysis 14 February 2017 Which Municipality/Municipalities is implicated in the report. What action has been taken to ensure accountability on the implicated Municipality or Municipalities? The cases investigated in the quarter under review were in the City of Joburg, Sedibeng, Emfuleni and Midvaal municipalities. The case in the City of Johannesburg is still under investigation, in Sedibeng the matter is currently pending a decision in the bargaining council, in Emfuleni the investigation outcome led to suspensions and the staff members are facing criminal charges and in Midvaal, the matter is served before the Mayoral Committee for resolution. Albeit this is a good initiative of ensuring engagements between the elected Councillors and the citizens, how measureable is the target since most of the Councillors do not reside in their respective wards? What action will be considered against Councillors deviating from conducting Community meetings? For the period in question (October November December): The target is measurable as councillors hold community meetings in the ward in which they were elected and report to the offices of the speakers. Any deviation must be reported to the Speaker to address the matter who must draw up a report Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

76 Date of the Meeting Question Asked Response by the department Committee Resolutions on the 3 rd Quarterly Report 2015/16 14 February 2017 Noting the under expenditure incurred in terms of Goods and Services, Households as well as Machinery and Equipment, what implications these expenditures have on service delivery? How is the Department going to ensure that the programmes do not underspend in the near future? How is the Department going to ensure that the programmes do not underspend in the near future? Under expenditure in accordance to economic classification was due to late commencement of projects during the financial year. Moreover, the Department receive an additional R40m during the adjustment budget period for disaster relief and to assist municipalities and the two issues diluted the level of expenditure downwards. The Department is confident that the expenditure will be above the 80% at the end of financial year. As mentioned above, the projects in question are underway; the Department anticipates the invoice and payment thereof on or before the end of the third quarter. The Department will in future ensure that all projects are implemented and completed on time so that expenditure is effected as per the plans of the Department, in accordance with the procurement and demand plans. With regards to job creation efforts in meeting the targets of the Tshepo initiatives for 2016/17 FY; the Department is expected to create 750 job opportunities and this was partially achieved; Provided 378 job opportunities to youths (slow recruitment by municipalities); The skills development intervention is based on Artisanship. Which municipalities in Gauteng were targeted for these initiatives? How many Artisans were recruited per each Municipality? How long is the duration of the contract? All municipalities were targeted. A total of 600 apprentices were recruited at a provincial level by Rand Water and not based on municipal boundaries The placement of apprentices is for a period of a year. How much has the Department invested in this initiative? What kind of job opportunities were provided to youth? All apprentices have been trained by Rand Water through the War On Leaks programme Apprentices have been trained in one of the following trades: a) Electrical; b) Fitting & Turning; c) Plumbing; d) Welding; and e) Instrumentation. The Department further planned to create job opportunities of the Community Works Programme (CWP) in the quarter under review. The Department provided job opportunities. 76 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

77 Date of the Meeting Question Asked Response by the department Committee Resolutions on the 3 rd Quarterly Report 2015/16 14 February 2017 How many job opportunities were provided in each Municipality (also indicate the names of those Municipalities)? Site Name Targeted Participation Rate Year Participation End November 2016 City of JHB 1,000 1, % Region A City of JHB 1, % Region C City of JHB 1,000 1, % Region E CoJ REGION F 1, % CoJ Region G 1,000 1, % EKURHULENI 1, % Emfuleni 1, % Lesedi ,000 1, % Merafong Midvaal Munsieville Randfontein Tshwane Metro Westonaria ,000 2, % 1, % 2,500 2, % 2,000 2, % 2,000 1, % 2,000 2, % 19,500 19, % How long is the duration of the contract? All participants on the programme have a one-year contract that is renewable annually. What kind of skills development will be transferred? The programme provides for skills development in a variety of areas, such as sewing, arts and crafts, gardening, placements for on the job training, where possible, etc. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

78 8. SCOPA RESOLUTIONS We do not have SCOPA issues as a Department Resolution No. Subject Details Response by the department Resolved (Yes/No) Not applicable. Not applicable. Not applicable. Not applicable. Not applicable. 9. PRIOR MODIFICATIONS TO AUDIT REPORTS There were no modifications to audit reports as the Department received clean audit in 2015/16 Financial Year. 10. INTERNAL CONTROL UNIT The unit was involved in performing the following activities: assisting the Department in developing Standard Operating Procedures for some directorates; verifying the validity and reliability of the portfolio of evidence against the quarterly performance reported; monitoring of the implementation of controls in resolving the internal and external audit findings; Reporting quarterly to the Gauteng Provincial Treasury on compliance to the PFMA and Treasury Regulations; and Monitoring the progress of implementing the drivers of key internal controls. 11. INTERNAL AUDIT AND AUDIT COMMITTEES Internal Audit Objectives Gauteng Audit Services (GAS) provides internal audit services to all GPG Departments. The objective of GAS is to promote sound corporate governance in the province through ensuring an effective internal control environment. Key Activities of Internal Audit Risk based Internal Audit Plans were developed by GAS and approved by the respective Departmental Audit Committees which exercise oversight on the activities of GAS. The Internal Audit activities were as follows: Risk and compliance audit; Performance Audit; and Computer Audit. Summary of work done by Internal Audit The unit managed to perform all (12) audits planned for the financial year 2015/16. The following table shows the summary of the work done: 78 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

79 Name of Audit Qualification Internal or If internal, Status Date Date Internal Audit No. Opinion of external position appointed resigned meetings in the attended Asset Management issued adequate but ineffective department Supply Chain Management Issued but withdrawn Inadequate and ineffective Human Mandla Capital Ncube Management Certified - Bursaries Internal External issued N/A Seconded Current. adequate but ineffective 4 Auditor (CIA). Audit Community Development Workers Quality Assurance Scope Limitation committee Management Performance Assessment Reviewer. Tools Issued member from Certified Corporate February N/A N/A Advisory Corporate Governance Risk Management Records Management Fraud Manager. Diploma in Accounting. Certificate in Accounting. Issued Issued Issued adequate but ineffective adequate and effective Inadequate and ineffective IT General computer controls Issued adequate but ineffective Lorraine Francois Bachelor of External N/A 1 October April Follow up on GAS findings Commerce (BCom). Issued Partially adequate and Masters in Business effective Follow up on AG Findings Administration Issued Partially adequate and (MBA). effective CIA. VMD/ PERSAL data analysis Post-graduate Certificate in Accounting. Issued N/A Advisory The table below discloses relevant information on the audit committee members: Name Qualification Internal or external If internal, position in the department Date appointed Date resigned No. of meetings attended Mandla Ncube Certified Internal Auditor (CIA) Quality Assurance Reviewer Certified Corporate Fraud Manager Diploma in Accounting Certificate in Accounting External - Seconded AC Member from February 2016 Current 5 Janice Meissner Chartered Accountant (SA) B.Com B.Com. Honours External - 01 October 2014 Current 04 Sidwell Mofokeng Dip. Public Sector Finance Certificate in Project Management (Wits P&DM) Cert Housing Program Management Development Management Development Programme External - 01 September 2016 Current 02 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

80 AUDIT COMMITTEE REPORT Report of the Audit Committee Cluster 05 Gauteng Department of Co-operative Governance and Traditional Affairs (COGTA) We are pleased to present our report for the financial year ended 31 March Audit Committee and Attendance The Audit Committee consists of the external Members listed hereunder and is required to meet a minimum of at least two times per annum as per provisions of the Public Finance Management Act (PFMA). In terms of the approved Terms of Reference (GPG Audit Committee Charter), five meetings were held during the current year, i.e. three meetings to consider the Quarterly Performance Reporting (financial and non-financial) and two meetings to review and discuss the Annual Financial Statements and the Auditor-General of South Africa s (AGSA) Audit and Management Reports. Non-Executive Members Name of Member Number of Meetings attended Mandla Ncube 05 Sidwell Mofokeng 02 Janice Meissner 04 Executive Members In terms of the GPG Audit Committee Charter, officials listed hereunder are obliged to attend meetings of the Audit Committee: Compulsory Attendees Number of Meetings attended Nhlakanipho Nkontwana (Accounting Officer) 05 Japhter Makhafola (Chief Financial Officer) 04 Lebogang Mokoena (Chief Risk Officer) 04 Mamafolo Namanyana (Acting Chief Risk Officer) 01 Lorraine Francois (Chief Audit Executive) Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

81 The Audit Committee noted that the Accounting Officer attended five (05) scheduled Audit Committee meetings. The Audit Committee is satisfied that the Department adhered to the provisions of the GPG Audit Committee Charter in relation to ensuring that there is proper representation for the Accounting Officer. The Members of the Audit Committee met with the Senior Management of the Department and Internal Audit, collectively to address risks and challenges facing the Department. A number of in-committee meetings were held to address control weaknesses and deviations within the Department. Audit Committee Responsibility The Audit Committee reports that it has complied with its responsibilities arising from section 38(1)(a) of the PFMA and Treasury Regulation The Audit Committee also reports that it has adopted appropriate formal terms of reference as its Audit Committee Charter, has conducted its affairs in compliance with this Charter and has discharged all its responsibilities as contained therein. The effectiveness of internal control and Information and Communication Technology (ICT) Governance The Audit Committee has observed that the overall control environment of the Department has continued to improve during the year under review. Some deficiencies in the system of internal control and deviations were reported in the Internal Audit Reports. The Audit Committee also reviewed the progress with respect to the ICT Governance in line with the ICT Framework issued by the Department of Public Services and Administration. Although there were some significant progress on the ICT internal control, the Audit Committee report its dissatisfaction with minimal progress made with the implementation of the Disaster Recovery Plan and the Business Continuity Plan. This continued to be a high risk for the Department. Internal Audit The Audit Committee is satisfied that the Internal Audit plan represents a clear alignment with the key risks, has adequate information systems coverage, and a good balance across the different categories of audits, i.e. risk based, mandatory, performance, computer and follow-up audits. The Audit Committee has noted considerable improvement in the communication between the Executive Management, the AGSA and the Internal Audit Function, which has strengthened the Corporate Governance initiatives within the Department. The Audit Committee wishes to stress that in order for the Internal Audit Function to operate at optimal level as expected by the Audit Committee, the shortage in human resources and skills should be addressed. Risk Management Progress on the departmental risk management was reported to the Audit Committee on a quarterly basis. The Audit Committee is satisfied that the actual management of risk is receiving attention, although there are areas that still require improvement. Management should take full responsibility for the entire Enterprise Risk Management Process and continue to support the Chief Risk Officer to even further enhance the performance of the Department. Forensic Investigations Investigations into alleged financial misconduct and fraud or improper conduct in Supply Chain Management were either completed or in progress during the year under review. Various measures were recommended, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

82 including taking action against any identified officials who are found guilty. The recommendations are at various stages of implementation. The quality of quarterly reports submitted in terms of the PFMA and the Division of Revenue Act The Audit Committee is satisfied with the content and quality of financial and non-financial quarterly reports prepared and submitted by the Accounting Officer of the Department during the year under review and confirms that the reports were in compliance with the statutory reporting framework. Evaluation of Annual Financial Statements The Audit Committee has: Reviewed and discussed the audited Annual Financial Statements to be included in the Annual Report, with the AGSA and the Accounting Officer; Reviewed the Audit Report of the AGSA; Reviewed the AGSA s Management Report and Management s response thereto; Reviewed the Department s compliance with legal and regulatory provisions; and Reviewed significant adjustments resulting from the audit. The Audit Committee concurs with and accepts the AGSA s conclusions on the Annual Financial Statements, and is of the opinion that the audited Annual Financial Statements be accepted and read together with the report of the AGSA. One-on-One Meeting with the Accounting Officer The Audit Committee has met with the Accounting Officer for the Department to address unresolved issues. One-on-One Meetings with the Executive Authority The Audit Committee did not meet with the Executive Authority for the Department to apprise the MEC on the performance of the Department. However after each quarterly meeting the Audit Committee prepared and sent a letter to the MEC with matters that need his intervention. Auditor-General of South Africa The Audit Committee has met with the AGSA to ensure that there are no unresolved issues. Mr. Mandla Ncube Chairperson of the Audit Committee Date: 31 May Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

83 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

84 PART D HUMAN RESOURCE MANAGEMENT 84 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

85 1. INTRODUCTION The information contained in this part of the annual report has been prescribed by the Minister for the Public Service and Administration for all departments in the public service. 2. OVERVIEW OF HUMAN RESOURCES The department operated on a functional structure pending its consultation, approval and concurrence from the Minister of Public Service and Administration. The concurrence was received on the 10th July 2015 with a condition that the affected and newly defined positions be subjected to job evaluations. This then necessitated the initiation of job evaluation processes and the conclusion thereof before the structure could be implemented. In the same reporting year the department had to conduct a process of staff matching and placement. The above processes were strenuous and lengthy. The department was also charged with an urgent responsibility to deal with cutting of red tape, this necessitated the establishment of a committee of enquiry Red Tape Committee in terms of Treasury regulation 20 of the Public Finance management Act, No. 1 of 1999, to conduct an inquiry into government bureaucratic processes and red tape that cause impediments to economic growth. It should be noted that the department had to impose a moratorium on the filling of vacancies during the year under review as a result of financial constraints and also to curb over expenditure on compensation of employees During the year under review the department also faced limitations in terms of the physical environment. This was because the department did not have its own physical accommodation and staff were scattered and accommodated in three separate buildings. This had a negative effect on the recruitment and appointment process, especially for persons living with disabilities. Despite the challenges mentioned above the department managed to stretch its human resources and was able to achieve its mandatory human resource management programmes and projects. The context as presented above should be noted in the oversight report below: 3. HUMAN RESOURCES OVERSIGHT STATISTICS 3.1. Personnel related expenditure The following tables summarises the final audited personnel related expenditure by programme and by salary bands. In particular, it provides an indication of the following: amount spent on personnel amount spent on salaries, overtime, homeowner s allowances and medical aid. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

86 Table Personnel expenditure by programme for the period 1 April 2016 and 31 March 2017 Programme Total expenditure (R 000) Personnel expenditure (R 000) Training expenditure (R 000) Professional and special services expenditure (R 000) Personnel expenditure as a % of total expenditure Average personnel cost per employee (R 000) Administration % 507 Local Governance % 335 Develop Planning % 529 Traditional Institutional Management % 517 TOTAL % 391 Table Personnel costs by salary band for the period 1 April 2016 and 31 March 2017 Salary band Personnel expenditure (R 000) % of total personnel cost No. of employees Average personnel cost per employee (R 000) Lower skilled (Levels 1-2) 782 0% Skilled (level 3-5) % Highly skilled production (levels 6-8) Highly skilled supervision (levels 9-12) % % Senior and Top management % (levels 13-16) TOTAL % Table Salaries, Overtime, Home Owners Allowance and Medical Aid by programme for the period 1 April 2016 and 31 March 2017 Programme Salaries Overtime Home Owners Allowance Amount (R 000 Salaries as a % of personnel costs Amount (R 000) Overtime as a % of personnel costs Amount (R 000) HOA as a % of personnel costs Amount (R 000) Medical Aid Medical aid as a % of personnel costs Administration % % % Local Governance % % % Develop Planning % 63 0% 665 2% % Traditional % % 193 4% Institutional Management TOTAL % 63 0% % % 86 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

87 Table Salaries, Overtime, Home Owners Allowance and Medical Aid by salary band for the period 1 April 2016 and 31 March 2017 Salary band Salaries Overtime Home Owners Allowance Medical Aid Amount (R 000 Salaries as a % of personnel costs Amount (R 000) Overtime as a % of personnel costs Amount (R 000) HOA as a % of personnel costs Amount (R 000) Medical aid as a % of personnel costs Skilled (level 1-2) % % 65 8% Skilled (level 3-5) % % 589 8% Highly skilled % 46 0% % % production (levels 6-8) Highly skilled % 17 0% % % supervision (levels 9-12 Senior % % 206 0% management (level 13-16) TOTAL % 63 0% % % 3.2. Employment and Vacancies The tables in this section summarise the position with regard to employment and vacancies. The following tables summarise the number of posts on the establishment, the number of employees, the vacancy rate, and whether there are any staff that are additional to the establishment. This information is presented in terms of three key variables: programme salary band critical occupations (see definition in notes below). Departments have identified critical occupations that need to be monitored. In terms of current regulations, it is possible to create a post on the establishment that can be occupied by more than one employee. Therefore, the vacancy rate reflects the percentage of posts that are not filled. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

88 Table Employment and vacancies by programme as on 31 March 2017 Programme Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Administration, permanent Development and planning, Permanent Effective business process, Permanent Gdr: housing development, Permanent Grd: cooperative governance, Permanent Grd: human settlements(housing), Permanent Integrated devel & sev del, Permanent Intergrate devel & serv del 0506, Permanent Local Governance, Permanent Pr1 administration, Permanent Traditional institution managent(pr 4),Permanent TOTAL Table Employment and vacancies by salary band as on 31 March 2017 Salary band Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Lower skilled ( 1-2) Skilled(3-5) Highly skilled production (6-8) Highly skilled supervision (9-12) Senior management (13-16) TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

89 Table Employment and vacancies by critical occupations as on 31 March 2017 Critical occupation Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Administrative related Architects town and traffic planners Bus and heavy vehicle drivers Civil Engineering technicians Cleaners in offices workshops hospitals etc Client inform clerks (switchboard recpt inform clerks) Communication and information related Community Development Workers Computer syetm designers and analysts Engineering sciences related Engineers and related professionals Finance and economics related Financial and related professional Financial clerks and credit controllers Food services aids and waiters General Legal Administration and Professional, Permanent Head of department / Chief Executive officer Household food and laundry services related Human Resources and organisation development & relate prof Human Resources clerks Human Resources related Language practitioners interpreters & other commun Legal related Library mail and related clerks Light vehicle related clerks Logistical support personnel, Permanent Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

90 Critical occupation Number of posts on approved establishment Number of posts filled Vacancy Rate Number of employees additional to the establishment Material- recording and transport clerks Messengers porters and deliverers Other administrative & related clerks and organisers Other administrative policy and related officers Other information technology personnel Other occupations Photographic lithographic and related workers Risk management and security services Secretaries & other keyboard operating clerks Security officers Senior managers Social work and related professionals, Permanent TOTAL Notes: The CORE classification, as prescribed by the DPSA, should be used for completion of this table. Critical occupations are defined as occupations or sub-categories within an occupation (a) in which there is a scarcity of qualified and experienced persons currently or anticipated in the future, either because such skilled persons are not available or they are available but do not meet the applicable employment criteria; (b) for which persons require advanced knowledge in a specified subject area or science or learning field and such knowledge is acquired by a prolonged course or study and/or specialised instruction; (c) where the inherent nature of the occupation requires consistent exercise of discretion and is predominantly intellectual in nature; and (d) in respect of which a department experiences a high degree of difficulty to recruit or retain the services of employees. 3.3 Filling of SMS Posts The tables in this section provide information on employment and vacancies as it relates to members of the Senior Management Service by salary level. It also provides information on advertising and filling of SMS posts, reasons for not complying with prescribed timeframes and disciplinary steps taken. 90 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

91 Table SMS post information as on 31 March 2017 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant Director-General/ Head of Department Salary Level Salary Level Salary Level Salary Level TOTAL Table SMS post information as on 30 September 2016 SMS Level Total number of funded SMS posts Total number of SMS posts filled % of SMS posts filled Total number of SMS posts vacant % of SMS posts vacant Director-General/ Head of Department Salary Level Salary Level Salary Level Salary Level TOTAL Table Advertising and filling of SMS posts for the period 1 April 2016 and 31 March 2017 SMS Level Advertising Filling of Posts Director-General/ Head of Department Number of vacancies per level advertised in 6 months of becoming vacant Number of vacancies per level filled in 6 months of becoming vacant Number of vacancies per level not filled in 6 months but filled in 12 months Salary Level Salary Level Salary Level Salary Level TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

92 3.4. Job Evaluation Within a nationally determined framework, executing authorities may evaluate or re-evaluate any job in his or her organisation. In terms of the Regulations all vacancies on salary levels 9 and higher must be evaluated before they are filled. The following table summarises the number of jobs that were evaluated during the year under review. The table also provides statistics on the number of posts that were upgraded or downgraded. Table Job Evaluation by Salary band for the period 1 April 2016 and 31 March 2017 Salary band Number of posts on approved establishment Number of Jobs Evaluated % of posts evaluated by salary bands Posts Upgraded Number % of posts evaluated Posts downgraded Number % of posts evaluated Lower Skilled (Levels1-2) Skilled (Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior Management Service Band A Senior Management Service Band B Senior Management Service Band C Senior Management Service Band D TOTAL The following table provides a summary of the number of employees whose positions were upgraded due to their post being upgraded. The number of employees might differ from the number of posts upgraded since not all employees are automatically absorbed into the new posts and some of the posts upgraded could also be vacant. The following table summarises the number of cases where remuneration bands exceeded the grade determined by job evaluation. Reasons for the deviation are provided in each case. The following table summarises the beneficiaries of the above in terms of race, gender, and disability. 92 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

93 Table Profile of employees whose positions were upgraded due to their posts being upgraded for the period 1 April 2016 and 31 March 2017 Gender African Asian Coloured White Total Female Male TOTAL Employees with a disability 0 Table Employees with salary levels higher than those determined by job evaluation by occupation for the period 1 April 2016 and 31 March 2017 Occupation Number of employees Job evaluation level Remuneration level Reason for deviation CFO Counter Offer Director: Legal Advisory Counter Offer Services Director: Back to Basics Counter Offer Director: Research and Counter Offer Analysis Deputy Director Level of post was downgraded due to Resolution 1 of 2012 on Post on Level Employee s benefits was not affected as per PSR. Assistant Director Level of post was downgraded due to Resolution 1 of 2012 on Post on Level Employee s benefits was not affected as per PSR. Admin Officer Posts were filled at level 8. Posts were job evaluated and came out at level 7. Employee s benefits were not affected as per PSR. Personal Assistant Counter Offer State Accountant Post was filled at level 8. Post was job evaluated and came out at level 7. Employee s benefits was not affected as per PSR. Help Desk Operator Post was filled at level 8. Post was job evaluated and came out at level 7. Employee s benefits was not affected as per PSR. CDW Automatic Upgrade by Chief of Staff. (Approval in the SP file) Telekom Operator Post was filled at level 5 before DPSA coordination process of Telekom Operator/ Switchboard Operator which came out at Level 4. Employee s benefits was not affected as per PSR. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

94 Occupation Number of employees Job evaluation level Remuneration level Reason for deviation General Foreman Post was filled at level 5 before DPSA coordination process of General foreman which came out at Level 4. Employee s benefits was not affected as per PSR. Driver Messenger Post was filled at level 5 before DPSA coordination process of Driver/Messenger which came out at Level 4. Employee s benefits was not affected as per PSR. Security Officer Posts were filled at level 4 before DPSA coordination process of Security Officers which came out at Level 3. Employee s benefits were not affected as per PSR. General Assistants 4 2 3&4 Posts were filled at level 3 and 4 before DPSA coordination process of General Assistant which came out at Level 2. Employee s benefits were not affected as per PSR TOTAL NUMBER OF EMPLOYEES WHOSE SALARIES EXCEEDED THE LEVEL DETERMINED BY JOB 38 EVALUATION PERCENTAGE OF TOTAL EMPLOYED 38/672 X 100 =5.6 % The following table summarises the beneficiaries of the above in terms of race, gender and disability. Table Profile of employees who have salary levels higher than those determined by job evaluation for the period 1 April 2016 and 31 March 2017 Gender African Asian Coloured White Total Female Male TOTAL Employees with a disability Employment Changes This section provides information on changes in employment over the financial year. Turnover rates provide an indication of trends in the employment profile of the department. The following tables provide a summary of turnover rates by salary band and critical occupations (see definition in notes below). 94 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

95 Table Annual turnover rates by salary band for the period 1 April 2016 and 31 March 2017 Salary band Number of employees at beginning of period-1 April 2016 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate Lower skilled ( Levels 1-2) Skilled (Levels3-5) Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior Management Service Bands A Senior Management Service Bands B Senior Management Service Bands C Senior Management Service Bands D Contracts TOTAL Table Annual turnover rates by critical occupation for the period 1 April 2016 and 31 March 2017 Critical occupation Number of employees at beginning of period- 1 April 2016 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate Administrative related Architects town and traffic planners Bus and Heavy vehicle drivers Civil Engineering technicians Cleaners in offices workshops hospitals etc Client inform clerks (switch recept inform clerks) Communication and information related Community Development Workers Computer system designers and analysts Engineering sciences related Engineers and related professional Finance and economics related Financial and related professional Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

96 Critical occupation Number of employees at beginning of period- 1 April 2016 Appointments and transfers into the department Terminations and transfers out of the department Turnover rate Financial clerks and credit controllers Food services aids and waiters Head of Department / Chief Executive Officer Household food and laundry services Human resources and organisation development and related prof Human Resources clerks Human Resources related Language practitioners interpreters & other commun Legal Related Library mail and related clerks Light vehicle drivers Logistical support personnel, Permanent Material- recording and transport clerks Messengers porters and deliverers Other administrative and related clerks and organisers Other administrative policy and related officers Other information technology personnel Other occupations Photographic lithographic and related workers Risk management and security services Secretaries and other keyboard operating clerks Security guards Security Officers Senior managers TOTAL Notes The CORE classification, as prescribed by the DPSA, should be used for completion of this table. 96 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

97 Critical occupations are defined as occupations or sub-categories within an occupation (a) in which there is a scarcity of qualified and experienced persons currently or anticipated in the future, either because such skilled persons are not available or they are available but do not meet the applicable employment criteria; (b) for which persons require advanced knowledge in a specified subject area or science or learning field and such knowledge is acquired by a prolonged course or study and/or specialised instruction; (c) where the inherent nature of the occupation requires consistent exercise of discretion and is predominantly intellectual in nature; and (d) in respect of which a department experiences a high degree of difficulty to recruit or retain the services of employees. The table below identifies the major reasons why staff left the department. Table Reasons why staff left the department for the period 1 April 2016 and 31 March 2017 Termination Type Number % of Total Resignations Death 5 16 Resignation Expiry of contract 3 13 Dismissal operational changes 0 0 Dismissal misconduct 1 3 Dismissal inefficiency 0 0 Discharged due to ill-health 0 0 Retirement 2 6 Transfer to other Public Service Departments 5 16 Other 0 0 TOTAL TOTAL NUMBER OF EMPLOYEES WHO LEFT AS A % OF TOTAL EMPLOYMENT 32 5 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

98 Table Promotions by critical occupation for the period 1 April 2016 and 31 March 2017 Occupation Employees 1 April 2016 Promotions to another salary level Salary level promotions as a % of employees Progressions to another notch within a salary Notch progression as a % of employees by occupation by occupation level Administrative related % Architects town and traffic planners Bus and Heavy vehicle drivers Civil Engineering technicians Cleaners in offices workshops hospitals etc Client inform clerks (switch recept inform clerks) Communication and information related Community Development Workers Computer system designers and analysts Engineering sciences related Engineers and related professional Finance and economics related Financial and related professional Financial clerks and credit controllers Food services aids and waiters Head of Department / Chief Executive Officer Household food and laundry services Human resources and organisation development and related prof Human Resources clerks Human Resources related % % % % % % % % % % % % % % % % % % % 98 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

99 Occupation Employees 1 Language practitioners interpreters & other commun April 2016 Promotions to another salary level Salary level promotions as a % of employees Progressions to another notch within a salary Notch progression as a % of employees by occupation by occupation level % Legal Related % Library mail and related clerks % Light vehicle drivers % Logistical support personnel, Permanent Material- recording and transport clerks Messengers porters and deliverers % % % Other administrative % and related clerks and organisers Other administrative % policy and related officers Other information % technology personnel Other occupations % Photographic lithographic and related workers Risk management and security services % % Secretaries and other % keyboard operating clerks Security guards % Security Officers % Senior managers % TOTAL % Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

100 Table Promotions by salary band for the period 1 April 2016 and 31 March 2017 Salary Band Employees 1 April 2016 Promotions to another salary level Salary bands promotions as a % of employees by salary level Progressions to another notch within a salary level Notch progression as a % of employees by salary bands Lower skilled ( Levels 1-2) % Skilled (Levels3-5) % Highly skilled production (Levels 6-8) Highly skilled supervision (Levels 9-12) Senior Management (Level 13-16) % % % TOTAL % 3.6. Employment Equity Table Total number of employees (including employees with disabilities) in each of the following occupational categories as on 31 March 2017 Occupational category Male Female Total Legislators, senior officials and managers African Coloured Indian White African Coloured Indian White Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations TOTAL Employees with disabilities Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

101 Table Total number of employees (including employees with disabilities) in each of the following occupational bands as on 31 March 2017 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and mid-management Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making TOTAL Table Recruitment for the period 1 April 2016 to 31 March 2017 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making TOTAL Employees with disabilities Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

102 Table Promotions for the period 1 April 2016 to 31 March 2017 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making TOTAL Employees with disabilities Table Terminations for the period 1 April 2016 to 31 March 2017 Occupational band Male Female Total African Coloured Indian White African Coloured Indian White Top Management Senior Management Professionally qualified and experienced specialists and midmanagement Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents Semi-skilled and discretionary decision making Unskilled and defined decision making TOTAL Employees with disabilities Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

103 Table Disciplinary action for the period 1 April 2016 to 31 March 2017 Disciplinary action Male Female Total African Coloured Indian White African Coloured Indian White Disciplinary Hearing/ Enquiry Table Skills development for the period 1 April 2016 to 31 March 2017 Occupational category Male Female Total Legislators, senior officials and managers African Coloured Indian White African Coloured Indian White Professionals Technicians and associate professionals Clerks Service and sales workers Skilled agriculture and fishery workers Craft and related trades workers Plant and machine operators and assemblers Elementary occupations TOTAL Employees with disabilities Signing of Performance Agreements by SMS Members All members of the SMS must conclude and sign performance agreements within specific timeframes. Information regarding the signing of performance agreements by SMS members, the reasons for not complying within the prescribed timeframes and disciplinary steps taken is presented here. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

104 Table Signing of Performance Agreements by SMS members as on 31 May 2016 SMS Level Director-General/ Head of Department Total number of funded SMS posts Total number of SMS members Total number of signed performance agreements Signed performance agreements as % of total number of SMS members % Salary Level Salary Level % Salary Level % Salary Level % TOTAL % Notes In the event of a National or Provincial election occurring within the first three months of a financial year all members of the SMS must conclude and sign their performance agreements for that financial year within three months following the month in which the elections took place. For example if elections took place in April, the reporting date in the heading of the table above should change to 31 July 2016 Table Reasons for not having concluded Performance agreements for all SMS members as on 31 March 2017 Reasons Disagreement on the content of the agreement. Table Disciplinary steps taken against SMS members for not having concluded Performance agreements as on 31 March 2017 Reasons Progressive discipline in the form of warning letters were issued to all SMS members who had not filed their 2016/17FY Performance Agreements Notes The reporting date in the heading of this table should be aligned with that of Table Performance Rewards To encourage good performance, the department has granted the following performance rewards during the year under review. The information is presented in terms of race, gender, disability, salary bands and critical occupations (see definition in notes below). 104 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

105 Table Performance Rewards by race, gender and disability for the period 1 April 2016 to 31 March 2017 Race and Gender Beneficiary Profile Cost Number of beneficiaries Number of employees % of total within group Cost (R 000) Average cost per employee African % R 5,727, R 14, Male % R 2,457, R 15, Female % R 3,269, R 13, Asian % R 135, R 45, Male % R 97, R 97, Female % R 38, R 19, Coloured % R 339, R 24, Male % R 134, R 67, Female % R 205, R 17, White % R 56, R 9, Male % R 19, R 9, Female % R 36, R 9, TOTAL % R 6,258, R 23, Table Performance Rewards by salary band for personnel below Senior Management Service for the period 1 April 2016 to 31 March 2017 Salary band Beneficiary Profile Cost Total cost as a Number of beneficiaries Number of employees % of total within salary bands Total Cost (R 000) Average cost per employee % of the total personnel expenditure Lower Skilled (Levels 1-2) R % Skilled (level 3-5) % R199, R8, % Highly skilled production % R3,885, R12, % (level 6-8) Highly skilled supervision % R1,422, R18, % (level 9-12) TOTAL % R5,507, R39, % Table Performance Rewards by critical occupation for the period 1 April 2016 to 31 March 2017 Critical occupation Beneficiary Profile Cost Number of beneficiaries Number of employees % of total within group Cost (R 000) Average cost per employee Engineering Technician Control % R117, R19, Grade A Construction Project Manager % R17, R17, Production Grade A MR5 Legal Administration Officer % R20, R20, Grade 5 Engineer Chief Grade A % R26, R26, TOTAL % R182, R84, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

106 Notes The CORE classification, as prescribed by the DPSA, should be used for completion of this table. Critical occupations are defined as occupations or sub-categories within an occupation (a) in which there is a scarcity of qualified and experienced persons currently or anticipated in the future, either because such skilled persons are not available or they are available but do not meet the applicable employment criteria; (b) for which persons require advanced knowledge in a specified subject area or science or learning field and such knowledge is acquired by a prolonged course or study and/or specialised instruction; (c) where the inherent nature of the occupation requires consistent exercise of discretion and is predominantly intellectual in nature; and (d) in respect of which a department experiences a high degree of difficulty to recruit or retain the services of employees; Table Performance related rewards (cash bonus), by salary band for Senior Management Service for the period 1 April 2016 to 31 March 2017 Salary band Beneficiary Profile Cost Total cost as a % of the total Number of beneficiaries Number of employees % of total within salary bands Total Cost (R 000) Average cost per employee personnel expenditure Band A R0.00 R0.00 0% Band B % R154, R51, % Band C % R245, R49, % Band D % R375, R41, % TOTAL % R775, R142, % 3.9. Foreign Workers The tables below summarise the employment of foreign nationals in the department in terms of salary band and major occupation. Table Foreign workers by salary band for the period 1 April 2016 and 31 March 2017 Salary band 01 April March 2017 Change Number % of total Number % of total Number % Change Lower skilled Highly skilled production (Lev. 6-8) Highly skilled supervision (Lev. 9-12) Contract (level 9-12) Contract (level 13-16) TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

107 Table Foreign workers by major occupation for the period 1 April 2016 and 31 March 2017 Salary band 01 April March 2017 Change Number % of total Number % of total Number % Change Professional and Managers TOTAL Leave utilisation The Public Service Commission identified the need for careful monitoring of sick leave within the public service. The following tables provide an indication of the use of sick leave and disability leave. In both cases, the estimated cost of the leave is also provided. Table Sick leave for the period 1 January 2016 to 31 December 2017 Salary band Total days % Days with Medical certification Number of Employees using sick leave % of total employees using sick leave Average days per employee Estimated Cost (R 000) Lower Skills (Level R ) Skilled (levels 3-5) R Highly skilled production (levels 6-8) Highly skilled supervision (levels 9-12) R R Top and Senior R management (levels 13-16) TOTAL R Table Disability leave (temporary and permanent) for the period 1 January 2016 to 31 December 2017 Salary band Total days % Days with Medical certification Number of Employees using disability leave % of total employees using disability leave Average days per employee Estimated Cost (R 000) Lower skilled R0.00 (Levels 1-2) Skilled (Levels 3-5) R0.00 Highly skilled % % 1.64 R production (Levels 6-8) Highly skilled % % 2.11 R supervision (Levels 9-12) Senior % % 0.45 R management (Levels 13-16) TOTAL % % 4.2 R Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

108 The table below summarises the utilisation of annual leave. The wage agreement concluded with trade unions in the PSCBC in 2000 requires management of annual leave to prevent high levels of accrued leave being paid at the time of termination of service. Table Annual Leave for the period 1 January 2016 to 31 December 2016 Salary band Total days taken Number of Employees using annual leave Average per employee Lower skilled (Levels 1-2) Skilled Levels 3-5) Highly skilled production (Levels ) Highly skilled supervision(levels ) Senior management (Levels 13-16) TOTAL Table Capped leave for the period 1 January 2016 to 31 December 2016 Salary band Total days of capped leave taken Number of Employees using capped leave Average number of days taken per employee Average capped leave per employee as on 31 March 2017 Lower skilled (Levels 1-2) Skilled Levels 3-5) Highly skilled production (Levels 6-8) Highly skilled supervision(levels 9-12) Senior management (Levels 13-16) TOTAL The following table summarise payments made to employees as a result of leave that was not taken. Table Leave payouts for the period 1 April 2016 and 31 March 2017 Reason Total amount (R 000) Number of employees Average per employee (R 000) Leave payout for 2015/16 due to R R0.00 non-utilisation of leave for the previous cycle Capped leave payouts on R R21, termination of service for 2015/16 Current leave payout on R R20, termination of service for 2015/16 TOTAL R R413, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

109 3.11. HIV/AIDS & Health Promotion Programmes Table Steps taken to reduce the risk of occupational exposure Units/categories of employees identified to be at high risk of contracting HIV & related diseases (if any) Community Development Workers Key steps taken to reduce the risk HIV counselling and Testing, Dissemination of information pertaining to HIV, Wellness days, Counselling and support services by ICAS Table Details of Health Promotion and HIV/AIDS Programmes (tick the applicable boxes and provide the required information) Question Yes No Details, if yes 1. Has the department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position. 2. Does the department have a dedicated unit or has it designated specific staff members to promote the health and well-being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose. 3. Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of this Programme. 4. Has the department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent. Yes Yes Yes Yes HIV Counselling and Testing, Dissemination of information pertaining to HIV, Wellness days, Counselling and support services by ICAS Chief Director: Corporate Management: Mr Raymond Nkabinde The Employee Health and Wellness Programme (EHWP) covers HIV as one pillar of the Programme. The unit consists of 4 employees with a budget of R The EHWP has 4 pillars governing the programme. The following services are provided 1) HIV&AIDS Management which focuses on HIV prevention, 2) Health and Productivity Management which includes employees on long term incapacity leave, 3) Wellness Management which includes counselling and health promotion, 4) Occupational Health and Safety within the workplace. The Department has established a Wellness Advisory, Peer Educators and OHS Committee. The committees consists of 8 Peer Educators, 25 OHS Committee members and the 4 members of the EHWP team. Some members are represented in more than one committee. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

110 Question Yes No Details, if yes 4. Has the department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent. 5. Has the department reviewed its employment policies and practices to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/ practices so reviewed. 6. Has the department introduced measures to protect HIV-positive employees or those perceived to be HIV-positive from discrimination? If so, list the key elements of these measures. 7. Does the department encourage its employees to undergo Voluntary Counselling and Testing? If so, list the results that you have you achieved. Yes Yes Yes Yes The committee consists of the following members: Ms. C Steenkamp (Deputy Director: EHWP), Mr. V. Tonga (Assistant Director: EHWP), Ms. P Tibini (EHWP Administrator), Ms. M. Molewa (OHS Practitoner),Mr. H Makhuvele (OHS Officer), Ms. I Mchalla (Policy & Research), Ms. M Xhasa (Monitoring & Evaluation), Ms. B Mhlanga (CDW), Mr. A Sefoka (CDW), Mr. El Khumalo (CDW), Mr. C Nkuna (HCM), Mr. L Seakamela (CDW), Mr. G Makwatse (CDW) Ms. M Pampadi (CDW), Ms. A Rautenbach (Facilities), Ms. L Mc Dillion (Facilities), Mr. D Mahlangu (Facilities), Ms. C Tlala (Disaster Management), Ms. B Lisa (Disaster Management), Ms. Z Potelwa (Disaster Management), Ms P Phiri (MIS), Ms. M Radebe (MIS),Ms. N Monama (Municipal Finance Support), Ms. I Sehunoe (IT), Mr. S Ngcobo (Risk Management), Ms. C Tlala (Disaster Management), Mr T Kajane (Procurement), Mr. P Komane ( Cooperative Governance), Mr. T Maimela (Knowledge &Info. Management), Mr. M Theledi (Integrity Management) Mr. K Manchidi (Security), Mr. J Dingiswayo (Security), Mr B Ntontela (Security), Mr. K Duze (Security), Mr. P Dangisa (Security). Mr. F. Molewa (IT), Ms. J. Janine (CFO s office), N. Makae(CIO) The Department is guided by both national policies and internal policies such as; the Basic Conditions of Employment Act and the internal Recruitment Policy. The Department is guided by the above policies to prevent discrimination. The wellness programme promotes a healthy lifestyle for all employees including those who are HIV positive. Those who have tested positive during a Wellness day event are provided with counselling and referred by the nurse to a clinic or doctor for treatment and care. Voluntary HIV Counselling and Testing (HCT) is conducted quarterly. 8. Has the department developed measures/indicators to monitor & evaluate the impact of its health promotion programme? If so, list these measures/ indicators. Yes Health reports from the respective service providers e.g. GEMS and ICAS, attendance registers of Wellness Days and events and direct feedback from employees. 110 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

111 3.12 Labour Relations Table Collective agreements for the period 1 April 2016 and 31 March 2017 Subject matter Date N/A N/A Notes If there were no agreements, keep the heading and replace the table with the following: Total number of Collective agreements None The following table summarises the outcome of disciplinary hearings conducted within the department for the year under review. Table Misconduct and disciplinary hearings finalised for the period 1 April 2016 and 31 March 2017 Outcomes of disciplinary hearings Number % of total Correctional counselling 0 0% Verbal warning 1 7% Written warning 8 53% Final written warning 3 20% Suspended without pay 2 13% Fine 0 0% Demotion 0 0% Dismissal 0 0% Not guilty 0 0% Case withdrawn 1 7% TOTAL % Notes If there were no agreements, keep the heading and replace the table with the following: Total number of Disciplinary hearings finalised None Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

112 Table Types of misconduct addressed at disciplinary hearings for the period 1 April 2016 and 31 March 2017 Type of misconduct Number % of total Falsifications of report 1 10% Failure to report 1 10% Failure to carry out lawful instruction 1 10% Insubordination 1 10% Misrepresentation of qualification 1 10% Misleading the employer 1 10% Fraud 2 20% Negligence 1 10% Poor performance due to ill health 1 10% Total % Table Grievances logged for the period 1 April 2016 and 31 March 2017 Grievances Number % of Total Number of grievances resolved 3 43% Number of grievances not resolved 4 57% TOTAL NUMBER OF GRIEVANCES LODGED 7 100% Table Disputes logged with Councils for the period 1 April 2016 and 31 March 2017 Disputes Number % of Total Number of disputes upheld 0 0 Number of disputes dismissed 1 50% Number of disputes pending 1 50% TOTAL NUMBER OF DISPUTES LODGED 2 100% Table Strike actions for the period 1 April 2016 and 31 March 2017 Total number of persons working days lost 0 days Total costs working days lost R 0.00 Amount recovered as a result of no work no pay (R 000) R Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

113 Table Precautionary suspensions for the period 1 April 2016 and 31 March 2017 Number of people suspended One Number of people whose suspension exceeded 30 days One Average number of days suspended days Cost of suspension(r 000) R Skills development This section highlights the efforts of the department with regard to skills development. Table Training needs identified for the period 1 April 2016 and 31 March 2017 Occupational category Gender Number of employees as at 1 April 2016 Training needs identified at start of the reporting period Learnerships Skills Programmes & other short courses Other forms of training (Internal Bursaries) Total Legislators, senior officials Female and managers Male Professionals Female Male Technicians and associate Female professionals Male Clerks Female Service and sales workers Male Female Skilled agriculture and Male fishery workers Female Craft and related trades Male workers Female Plant and machine Male operators and assemblers Female Elementary occupations Male Female Sub Total Male Female TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

114 Table Training provided for the period 1 April 2016 and 31 March 2017 Occupational category Gender Number of employees as at 1 April 2016 Training provided within the reporting period Learnerships Skills Programmes & other short courses Legislators, senior officials Female and managers Male Professionals Female Male Other forms of training Technicians and associate Female professionals Male Clerks Female Male Service and sales workers Female Male Skilled agriculture and Female fishery workers Male Craft and related trades Female workers Male Plant and machine Female operators and assemblers Male Elementary occupations Female Male Sub Total Female Male TOTAL Total Injury on duty The following tables provide basic information on injury on duty. Table Injury on duty for the period 1 April 2016 and 31 March 2017 Nature of injury on duty Number % of total Required basic medical attention only Temporary Total Disablement 0 0 Permanent Disablement 0 0 Fatal 0 0 TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

115 3.15. Utilisation of Consultants The following tables relates information on the utilisation of consultants in the department. In terms of the Public Service Regulations consultant means a natural or juristic person or a partnership who or which provides in terms of a specific contract on an ad hoc basis any of the following professional services to a department against remuneration received from any source: (a) (b) (c) The rendering of expert advice; The drafting of proposals for the execution of specific tasks; and The execution of a specific task which is of a technical or intellectual nature, but excludes an employee of a department. Table Report on consultant appointments using appropriated funds for the period 1 April 2016 and 31 March 2017 Project title Total number of consultants that worked on project Duration (work days) Contract value in Rand Red Tape Committee days R Risk Management Committee days R Total number of projects Total individual consultants Total duration Work days Total contract value in Rand R Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

116 ANNUAL FINANCIAL STATEMENTS OF GAUTENG DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS FOR THE YEAR ENDED 31 MARCH 2017 PART E FINANCIAL INFORMATION 116 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

117 TABLE OF CONTENTS REPORT OF THE AUDITOR-GENERAL 119 APPROPRIATION STATEMENT 122 NOTES TO THE APPROPRIATION STATEMENT 148 STATEMENT OF FINANCIAL PERFORMANCE 151 STATEMENT OF FINANCIAL POSITION 152 STATEMENT OF CHANGES IN NET ASSETS 153 CASH FLOW STATEMENT 154 ACCOUNTING POLICIES 155 NOTES TO THE ANNUAL FINANCIAL STATEMENTS 162 ANNEXURES TO THE ANNUAL FINANCIAL STATEMENTS 189 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

118 118 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

119 1. REPORT AUDITOR OF THE GENERAL S AUDITOR-GENERAL REPORT: PREDETERMINED OBJECTIVES Opinion I have audited the financial statements of the Gauteng Department of Co-operative Governance and Traditional Affairs set out on pages 122 to 196, which comprise the appropriation statement, the statement of financial Report of the auditor-general to Gauteng Provincial Legislature on vote no. 7: Gauteng Department of Co-operative Governance and Traditional Affairs position as at 31 March 2017, the statement of financial performance, statement of changes in net assets and cash flow statement for the year then ended, as well as the notes to the financial statements, including a summary of significant accounting policies. In my Report opinion, on the the financial audit statements of the financial present statements fairly, in all material respects, the financial position of the Gauteng Department of Co-operative Governance and Traditional Affairs as at 31 March 2017, and its financial performance Opinion and cash flows for the year then ended in accordance with the Modified Cash Standards (MCS) prescribed by the National Treasury, the requirements of the Public Finance Management Act of South Africa, 1. I have audited the financial statements of the Gauteng Department of Cooperative 1999 (Act No. 1 of 1999) (PFMA) and the Division of Revenue Act of South Africa, 2016 (Act No. 3 of 2016) (DoRA). Governance and Traditional Affairs set out on pages 122 to 196, which comprise the appropriation statement, the statement of financial position as at 31 March 2017, the Basis for opinion statement of financial performance, statement of changes in net assets and cash flow I conducted statement my audit for in the accordance year then with ended, the as International well as the notes Standards to the on financial Auditing statements, (ISAs). My responsibilities under those including standards a summary are further of described significant in accounting the auditor-general s policies. responsibilities for the audit of the financial statements section of my report. 2. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Gauteng Department of Cooperative Governance and Traditional I am independent of the department in accordance with the International Ethics Standards Board for Accountants Affairs as at 31 March 2017, and its financial performance and cash flows for the year Code of ethics for professional accountants (IESBA code) together with the ethical requirements that are relevant then ended in accordance with the Modified Cash Standards (MCS) prescribed by the to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements National Treasury, the requirements of the Public Finance Management Act of South and the IESBA Africa, code (Act No. 1 of 1999) (PFMA) and the Division of Revenue Act of South Africa, 2016 (Act No. 3 of 2016) (DoRA). I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Basis for opinion Emphasis of matter 3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). I draw attention to the matter below. My opinion is not modified in respect of this matter. My responsibilities under those standards are further described in the auditor-general s responsibilities for the audit of the financial statements section of my report. Material underspending of the budget As disclosed 4. I am in the independent appropriation of the statement, department the department in accordance has with materially the International underspent Ethics the budget by 12% to the amount of Standards R Board for Accountants Code of ethics for professional accountants (IESBA code) together with the ethical requirements that are relevant to my audit in South Africa. I have fulfilled my other ethical responsibilities in accordance with these requirements Responsibilities of accounting officer for the financial statements and the IESBA code. The accounting officer is responsible for the preparation and fair presentation of the financial statements in accordance 5. I believe with MCS that prescribed the audit by evidence the National I have Treasury, obtained the is sufficient requirements and appropriate of the PFMA to and provide DoRA a for such internal control basis as for the my accounting opinion. officer determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Emphasis of matter In preparing the financial statements, the accounting officer is responsible for assessing the Gauteng Department 6. I draw attention to the matter below. My opinion is not modified in respect of this matter. of Co-operative Governance and Traditional Affairs ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless there is an intention to either liquidate the department or to cease operations, or there is no realistic alternative but to do so. Auditor-general s responsibilities for the audit of the financial statements 1 My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

120 material misstatement, whether due to fraud or error, and to issue an auditor s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are Material considered underspending material if, individually of the budget or in the aggregate, they could reasonably be expected to influence the economic 7. As decisions disclosed of in users the appropriation taken on the basis statement, of these the financial department statements. has materially underspent the budget by 12% to the amount of R A further description of my responsibilities for the audit of the financial statements is included in the annexure to the auditor s report. Responsibilities of the accounting officer for the financial statements 8. The accounting officer is responsible for the preparation and fair presentation of the Report on the audit of the annual performance report financial statements in accordance with MCS prescribed by the National Treasury, the Introduction requirements and of scope the PFMA and DoRA for such internal control as the accounting officer determines is necessary to enable the preparation of financial statements that are free In accordance with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA) and the general from material misstatement, whether due to fraud or error. notice issued in terms thereof I have a responsibility to report material findings on the reported performance information 9. In preparing against predetermined the financial statements, objectives for the selected accounting programmes officer is presented responsible in the for assessing annual performance report. I performed the Gauteng procedures Department to identify of Cooperative findings but Governance not to gather and evidence Traditional to express Affairs assurance. ability to continue as a going concern, disclosing, as applicable, matters relating to going concern My procedures and using address the the going reported concern performance basis of information, accounting unless which must there be is based an intention the approved to either performance planning documents liquidate the of department the department. or to cease I have operations, not evaluated or there completeness is no realistic and alternative appropriateness but to of the performance do indicators so. 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 Auditor-general s as part of the reported responsibilities performance for information. the audit Accordingly, of the financial my findings statements do not extend to these matters. 10. My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or I evaluated the usefulness and reliability of the reported performance information in accordance with the criteria error, and to issue an auditor s report that includes my opinion. Reasonable assurance is developed a from high the level performance of assurance, management but is not a and guarantee reporting that framework, an audit conducted as defined in accordance the general notice, for the following with selected ISAs will programmes always detect presented a material in the misstatement annual performance when it exists. report Misstatements of the department can for the year ended 31 March arise from 2017: 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 financial statements. 11. A further description of my responsibilities for the audit of the financial statements is included in the annexure to the auditor s report. I performed procedures to determine whether the reported performance information was properly presented and whether Report performance on the audit was of consistent the annual with performance the approved performance report planning documents. I performed further procedures to determine whether the indicators and related targets were measurable and relevant, and assessed Introduction the reliability and of the scope reported performance information to determine whether it was valid, accurate and complete. 12. 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 material I did not identify findings any on material the reported findings performance on the usefulness information and reliability against predetermined of the reported objectives performance for information for the selected programmes. presented in the annual performance report. I performed procedures to identify findings but not to gather evidence to express assurance. Other matters I draw attention to the matters below. Achievement of planned targets 2 Refer to the annual performance report on page(s) for information on the achievement of planned targets for the year and explanations provided for the under and overachievement of a number of targets. 120 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

121 Adjustment of material misstatements I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Programme 2: Local governance and Programme 13. My procedures address the reported performance information, which must be based on 3: Development the approved and planning. performance As management planning documents subsequently of corrected the department. the misstatements, I have not evaluated I did not report any material findings the completeness on the usefulness and appropriateness and reliability of of the the reported performance performance indicators information. included in the planning documents. My procedures also did not extend to any disclosures or assertions Report relating on the to planned audit performance of compliance strategies and with information legislation in respect of future periods that may be included as part of the reported performance information. Accordingly, my Introduction findings do and not extend scope to these matters. In accordance with the PAA and the general notice issued in terms thereof I have a responsibility to report material 14. findings I evaluated on the the compliance usefulness and of the reliability department of the with reported specific performance matters in information key legislation. in I performed procedures accordance to identify findings with the but criteria not developed to gather evidence from the to performance express assurance. management and reporting framework, as defined in the general notice, for the following selected programmes presented in the annual performance report of the department for the year ended I did not identify any instances of material non-compliance with specific matters in key legislation, as set out in 31 March 2017: the general notice issued in terms of the PAA. Programmes Pages in the annual Other information performance report The Gauteng Department of Co-operative Governance and Traditional Affairs accounting officer is responsible Programme 2 Local governance for the other information. The other information comprises the information included in the annual report. The Programme 3 Development and planning other information does not include the financial statements, the auditor s report thereon and those selected programmes presented in the annual performance report that have been specifically reported on in the auditor s 15. I performed procedures to determine whether the reported performance information was report. properly presented and whether performance was consistent with the approved performance planning documents. I performed further procedures to determine whether My opinion the on indicators the financial and statements related targets and findings were measurable on the reported and relevant, performance and assessed information the and compliance with legislation reliability do not of the cover reported the other performance information information and I do not to express determine an audit whether opinion it was or any valid, form of assurance conclusion accurate thereon. and complete. 16. I did not identify any material findings on the usefulness and reliability of the reported In connection with my audit, my responsibility is to read the other information and, in doing so, consider whether performance information for the selected programmes. the other information is materially inconsistent with the financial statements and the selected programmes presented Other in the matters annual performance report, or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work I have performed on the other information obtained prior to the date of this 17. auditor s I draw report, attention I conclude to the matters that there below. is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. Achievement of planned targets Internal control deficiencies 18. Refer to the annual performance report on pages 33 to 67 for information on the I considered achievement internal control of planned relevant targets to my for audit the of year the financial and explanations statements, provided reported for performance the under and information and compliance overachievement with applicable of a number legislation; of targets. however, my objective was not to express any form of assurance thereon. I did not identify any significant deficiencies in internal control. Adjustment of material misstatements 19. I identified material misstatements in the annual performance report submitted for auditing. These material misstatements were on the reported performance information of Programme 2: Local governance and Programme 3: Development and planning. As management subsequently corrected the misstatements, I did not report any material findings on the usefulness and reliability of the reported performance information. Johannesburg 31 July Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

122 Report on the audit of compliance with legislation Introduction and scope 20. 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 department with specific matters in key legislation. I performed procedures to identify findings but not to gather evidence to express assurance. 21. I did not identify any instances of material non-compliance with specific matters in key legislation, as set out in the general notice issued in terms of the PAA. Other information 22. The Gauteng Department of Cooperative Governance and Traditional Affairs accounting officer is responsible for the other information. The other information comprises the information included in the annual report. The other information does not include the financial statements, the auditor s report thereon and those selected programmes presented in the annual performance report that have been specifically reported on in the auditor s report. 23. 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. 24. 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 financial statements and the selected programmes presented in the annual performance report, or my knowledge obtained in the audit, or otherwise appears 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. I have nothing to report in this regard Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

123 Internal control deficiencies 25. I considered internal control relevant to my audit of the financial statements, reported performance information and compliance with applicable legislation; however, my objective was not to express any form of assurance thereon. I did not identify any significant deficiencies in internal control. Johannesburg 31 July Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

124 Annexure Auditor-general s responsibility for the audit 1. As part of an audit in accordance with the ISAs, I exercise professional judgement and maintain professional scepticism throughout my audit of the financial statements, and the procedures performed on reported performance information for selected programmes and on the department s compliance with respect to the selected subject matters. Financial statements 2. In addition to my responsibility for the audit of the financial statements as described in the auditor s report, I also: identify and assess the risks of material misstatement of the financial statements whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. obtain an understanding of internal control relevant to the audit 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 department s internal control. evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the accounting officer. conclude on the appropriateness of the accounting officer s use of the going concern basis of accounting in the preparation of the financial statements. I also conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Gauteng Department of Cooperative Governance and Traditional Affairs ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor s report to the related disclosures in the financial statements about the material uncertainty or, if such disclosures are inadequate, to modify the opinion on the financial statements. My conclusions are based on the information available to me at the date of the auditor s report. However, future events or conditions may cause a department to cease to continue as a going concern. evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. Communication with those charged with governance 3. I communicate with the accounting officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

125 4. I also confirm to the accounting officer that I have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to have a bearing on my independence and where applicable, related safeguards. 7 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

126 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March 2017 Appropriation per programme 2016/ /16 Voted Funds Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure R 000 R 000 R 000 R 000 R 000 % R 000 R 000 R 000 Programme 1: Administration 123, , ,292 3, % 112, ,531 Programme 2: Local Governance 203, , ,722 6, % 208, ,287 Programme 3: Development Planning 179, , ,805 50, % 78,642 50,268 Programme 4: Traditional Institutional Management Subtotal 10, ,414 10, % 7,248 6, , , ,876 60, % 406, ,888 TOTAL 516, , ,876 60, % 406, , / /16 Final Appropriation Expenditure Final Appropriation Expenditure TOTAL (brought forward) Reconciliation with statement of financial performance ADD Departmental receipts 1, amounts per statement of financial performance (total revenue) ADD 518, ,935 amounts per statement of financial performance (total expenditure) 455, , Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

127 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March 2017 Appropriation per economic classification 2016/ /16 Economic classification Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure R 000 R 000 R 000 R 000 R 000 % R 000 R 000 R 000 Current payments 417,695 (7,964) - 409, ,180 40, % 324, ,556 Compensation of employees 281, , ,335 5, % 254, ,479 Salaries and wages 242,229 (285) - 241, ,604 4, % 216, ,017 Social contributions 39, ,355 37,731 1, % 38,238 35,462 Goods and services 136,396 (7,964) - 128,432 93,845 34, % 70,170 69,077 Administrative fees % Advertising 12,408 1,684-14,092 14, % 5,635 7,343 Minor assets , % Audit costs: External 3,473 (625) - 2,848 2, % 3,214 2,966 Bursaries: Employees % Catering: Departmental activities 2, ,922 2, % 2,559 3,839 Communication (G&S) 9,221 (1,455) - 7,766 7, % 8,386 10,419 Computer services 5,782 (99) - 5,683 5, % Consultants: Business and advisory services 3,292 (1,529) - 1, , % Legal services 2, ,246 3, % Contractors 1,619 (45) - 1, , % 2, Agency and support / outsourced services 53,061 (16,847) - 36,214 8,752 27, % 11,352 10,968 Entertainment Fleet services (including government motor transport) 7, ,713 8, % 5,960 6,069 Inventory: Materials and supplies Inventory: Other supplies Consumable supplies 4,390 11,623-16,013 15, % 5,098 6,175 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

128 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March 2017 Appropriation per economic classification 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure R 000 R 000 R 000 R 000 R 000 % R 000 R 000 R 000 Consumable: Stationery, printing and office supplies 3,554 1,173-4,727 4, % 3,804 3,393 Operating leases 2,091 (1,163) % Property payments 2,102 (175) - 1,927 1, % 795 1,145 Travel and subsistence 6,358 1,691-8,049 5,698 2, % 5,864 5,278 Training and development 8,029 (5,419) - 2,610 3,207 (597) 122.9% 3,085 2,924 Operating payments 1,284 (616) % 1, Venues and facilities 5,308 1,400-6,708 6,779 (71) 101.1% 5,339 4,985 Transfers and subsidies 42,937 7,924-50,861 50, % 51,339 50,659 Provinces and municipalities 40,884 8,729-49,613 49, % 49,549 48,988 Households 2,053 (805) - 1,248 1, % 1,790 1,671 Payments for capital assets 55, ,805 35,769 20, % 30,146 1,170 Buildings and other fixed structures 35, ,700 31,600 4, % - - Other fixed structures Machinery and equipment 20, ,105 4,169 15, % 30,146 1,170 Transport equipment 1, ,925-1,925-1,000 - Other machinery and equipment 18, ,180 4,169 14, % 29,146 1,170 Payment for financial assets % TOTAL 516, , ,876 60, % 406, , Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

129 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March 2017 Statutory Appropriation per economic classification 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 417,695 (7,964) - 409, ,180 40, % 324, ,556 Compensation of employees 281, , ,335 5, % 254, ,479 Goods and services 136,396 (7,964) - 128,432 93,845 34, % 70,170 69,077 Transfers and subsidies 42,937 7,924-50,861 50, % 51,339 50,659 Provinces and municipalities 40,884 8,729-49,613 49, % 49,549 48,988 Households 2,053 (805) - 1,248 1, % 1,790 1,671 Payments for capital assets 55, ,805 35,769 20, % 30,146 1,170 Buildings and other fixed structures 35, ,700 31,600 4, % - - Machinery and equipment 20, ,105 4,169 15, % 30,146 1,170 Payments for financial assets % TOTAL 516, , ,876 60, % 406, ,888 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

130 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March 2017 Programme: 1 ADMINISTRATION Adjusted Appropriation Shifting of Funds Virement Final Appropriation 2016/ /16 Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R Office of the MEC 3, ,829 3, % 3,975 3, Corporate Services 120, , ,227 2, % 108, ,692 Total of sub Programmes , ,292 3, % 112, ,531 Current payments 117, , ,169 1, % 106, ,187 Compensation of employees 79, ,842 79, % 76,156 71,754 Salaries and wages 68,976 1,429-70,405 70, % 66,100 63,438 Social contributions 10,866 (1,429) - 9,437 9, % 10,056 8,316 Goods and services 37, ,602 37,596 1, % 30,559 30,433 Administrative fees % Advertising 3, ,495 4, % 1,260 2,278 Minor assets % Audit costs: External 3,458 (814) - 2,644 2, % 3,199 2,870 Bursaries: Employees % Catering: Departmental activities 584 (77) % Communication (G&S) 4,496 (179) - 4,317 4, % 2,600 4,532 Computer services 4, ,215 5, % Consultants: Business and advisory services % Legal services 2, ,775 2, % Contractors 242 (46) % 2, Agency and support / outsourced services 1,164 (808) % 1,192 1,354 Entertainment Fleet Services 5, ,008 6, % 5,960 6,069 Inventory: Materials and supplies Consumable supplies 2, ,431 2, % 2,790 2, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

131 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March 2017 Programme: 1 ADMINISTRATION Adjusted Appropriation Shifting of Funds Virement Final Appropriation 2016/ /16 Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Consumable: Stationery, printing and office supplies 2, ,124 2, % 1,721 1,871 Operating leases 841 (458) % Property payments (1) 100.1% Travel and subsistence 1, ,316 2, % 1,998 1,630 Training and development ,058 1, % 991 1,477 Operating payments 389 (229) % Venues and facilities 1, , % 1,927 1,921 Transfers and subsidies 2,053 (805) - 1,248 1, % 1,790 1,671 Households 2,053 (805) - 1,248 1, % 1,790 1,671 Payments for capita assets 4, ,105 1,809 2, % 3,346 1,170 Machinery and equipment 4, ,105 1,809 2, % 3,346 1,170 Payment for financial assets % TOTAL 123, , ,292 3, % 112, ,531 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

132 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Office of the MEC 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 3, ,829 3, % 3,975 3,839 Compensation of employees 2, ,032 1, % 1,900 1,865 Goods and services 1, ,797 1, % 2,075 1,974 TOTAL 3, ,829 3, % 3,975 3, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

133 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Corporate Services 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 113, , , % 102,740 98,348 Compensation of employees 77, ,810 77, % 74,256 69,889 Goods and services 36, ,805 36, % 28,484 28,459 Transfers and subsidies 2,053 (805) - 1,248 1, % 1,790 1,671 Households 2,053 (805) - 1,248 1, % 1,790 1,671 Payments for capital assets 4,105-4,105 1,809 2, % 3,346 1,170 Machinery and equipment 4,105-4,105 1,809 2, % 3,346 1,170 Payments for financial assets % TOTAL 120, , ,227 2, % 108, ,692 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

134 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March / /16 Programme: 2 LOCAL GOVERNANCE Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure Sub programme R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R Municipal Administration 14,364 (389) - 13,975 11,867 2, % 26,673 27, Municipal Finance 10,654 5,529-16,183 15, % 11,123 10, Public Participation 145,233 (5,140) - 140, ,007 3, % 132, , Capacity Development 18, ,358 18, % 27,180 26, Municipal Performance Monitoring, reporting and Evaluation 14, ,482 13, % 11,265 10,891 Total of sub Programme 203, , ,722 6, % 208, ,287 Current payments 194,707 (5,529) - 189, ,809 6, % 169, ,299 Compensation of employees 165, , ,942 5, % 144, ,203 Salaries and wages 142,713 (1,790) - 140, ,810 4, % 120, ,160 Social contributions 23,233 1,790-25,023 24, % 23,811 23,043 Goods and services 28,761 (5,529) - 23,232 21,867 1, % 25,340 25,096 Administrative fees 99 (36) % Advertising 4, ,268 4, % 2,933 2,735 Minor assets 184 (102) % Audit costs: External % Bursaries: Employees Catering: Departmental activities 298 (73) % 626 2,129 Communication (G&S) 4,725 (1,390) - 3,335 3, % 5,786 5,887 Computer services % - - Consultants: Business and advisory services 970 (661) % Legal services % - - Contractors % - - Agency and support / outsourced services 7,025 (600) - 6,425 6, % 6,923 6,890 Fleet services (including government motor transport) % - - Consumable supplies 228 (167) % Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

135 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March / /16 Programme: 2 LOCAL GOVERNANCE Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure Sub programme R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Consumable: Stationery, printing and office supplies 429 1,282-1,711 1, % 1,116 1,414 Property payments % 34 - Travel and subsistence 1,983 1,326-3,309 1,505 1, % 2,287 2,146 Training and development 5,096 (4,568) ,685 (1,157) 319.1% 1, Operating payments 687 (354) % Venues and facilities 2,489 (1,267) - 1,222 1,564 (342) 128.0% 2,582 2,175 Transfers and subsidies 8,384 5,529-13,913 13, % 38,549 37,988 Provinces and municipalities 8,384 5,529-13,913 13, % 38,549 37,988 TOTAL 203, , ,722 6, % 208, ,287 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

136 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Municipal Administration 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 14,364 (389) 13,975 11,867 2, % 7,610 8,041 Compensation of employees 9, ,564 8,206 1, % 5,216 5,036 Goods and services 4,800 (389) - 4,411 3, % 2,394 3,005 Transfers and subsidies ,063 19,063 Provinces and municipalities ,063 19,063 TOTAL 14,364 (389) - 13,975 11,867 2, % 26,673 27, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

137 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Municipal Finance 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 7, ,654 7, % 7,123 6,876 Compensation of employees 4, ,939 4, % 5,303 5,193 Goods and services 2, ,715 2, % 1,820 1,683 Transfers and subsidies 3,000 5,529-8,529 8, % 4,000 4,000 Provinces and municipalities 3,000 5,529-8,529 8, % 4,000 4,000 TOTAL 10,654 5,529-16,183 15, % 11,123 10,876 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

138 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Public Participation 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 145,233 (5,140) - 140, ,007 3, % 132, ,964 Compensation of employees 132, , ,609 2, % 116, ,201 Goods and services 12,843 (5,140) - 7,703 7, % S15,405 14,763 TOTAL 145,233 (5,140) - 140, ,007 3, % 132, , Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

139 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Capacity Development 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 12, ,974 12, % 11,694 11,527 Compensation of employees 7, ,671 7, % 6,695 6,607 Goods and services 5, ,303 5, % 4,999 4,920 Transfers and subsidies 5, ,384 5, % 15,486 14,925 Provinces and municipalities 5, ,384 5, % 15,486 14,925 TOTAL 18, ,358 18, % 27,180 26,452 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

140 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Municipal Performance Monitoring, Reporting and Evaluation 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 14, ,482 13, % 11,265 10,891 Compensation of employees 11, ,382 11, % 10,543 10,166 Goods and services 3, ,100 2, % TOTAL 14, ,482 13, % 11,265 10, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

141 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March / /16 Adjusted Programme 3: Appropriation DEVELOPMENT PLANNING Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure Sub programme R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R Land Management % 5,611 4, IDP Coordination 6, ,407 6, % 4,388 3, Disaster Management 105,960 (4,050) - 101,910 72,133 29, % 48,682 21, Municipal Infrastructure 67,026 3,644-70,670 50,254 20, % 19,961 19,829 Total of Sub programme 179, , ,805 50, % 78,642 50,268 Current payments 94,895 (3,200) - 91,695 59,145 32, % 40,842 39,268 Compensation of employees 30, ,316 29, % 28,871 28,007 Salaries and wages 26, ,076 25, % 25,216 24,485 Social contributions 4,244 (4) - 4,240 3, % 3,655 3,522 Goods and services 64,579 (3,200) - 61,379 29,495 31, % 11,971 11,261 Administrative fees % Advertising 4, ,329 5, % 1,442 2,258 Minor assets % Catering: Departmental activities 1,135 (53) - 1,082 1, % 1,026 1,017 Communication (G&S) % - - Computer services 1,000 (852) % Consultants: Business and advisory services 2,000 (1,278) Legal services % 37 - Contractors 1, , , % 386 Agency and support / outsourced services 41,618 (12,885) - 28,733 1,811 26, % 2,493 1,428 Fleet services (including government motor transport) 2, ,193 1, % - - Inventory: Other supplies Consumable supplies 1,951 11,387-13,338 13, % 2,263 3,569 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

142 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March / /16 Programme 3: DEVELOPMENT PLANNING Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure Sub programme R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Consumable: Stationery, printing and office supplies % Operating leases 1,250 (705) Property payments 1,643 (452) - 1, % Travel and subsistence 2,029 (102) 1,927 1, % 1,109 1,302 Training and development 1,706 (770) % Operating payments 208 (33) % Venues and facilities 1, ,948 1, % Transfers and subsidies 32,500 3,200 35,700 35, % 11,000 11,000 Provinces and municipalities 32,500 3,200 35,700 35, % 11,000 11,000 Payments for capital assets 51, ,700 33,960 17, % 26,800 - Buildings and other fixed structures 35, ,700 31,600 4, % - - Machinery and equipment 16, ,000 2,360 13, % 26,800 - Transport equipment 1, ,925 1,925 1,000 - Other machinery and equipment 14, ,075 2,360 11, % 25,800 - TOTAL 179, , ,805 50, % 78,642 50, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

143 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Land Use Management 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments % 5,611 4,792 Compensation of employees ,369 4,755 Goods and services % TOTAL % 5,611 4,792 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

144 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March IDP Coordination 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 6, ,407 6, % 4,388 3,978 Compensation of employees 4, ,092 5, % 3,857 3,776 Goods and services 1, ,315 1, % TOTAL 6, ,407 6, % 4,388 3, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

145 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Disaster Management 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 54,260 (4,050) - 50,210 38,173 12, % 21,882 21,669 Compensation of employees 14, ,220 13, % 11,474 11,355 Goods and services 40,040 (4,050) - 35,990 24,210 11, % 10,408 10,314 Payments for capital assets 51, ,700 33,960 17, % 26,800 - Buildings and other fixed structures 35, ,700 31,600 4, % - - Machinery and equipment 16, ,000 2,360 13, % 26,800 - TOTAL 105,960 (4,050) - 101,910 72,133 29, % 48,682 21,669 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

146 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Municipal Infrastructure 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 34, ,970 14,554 20, % 8,961 8,829 Compensation of employees 11,410 (406) - 11,004 10, % 8,171 8,121 Goods and services 23, ,966 3,958 20, % Transfers and subsidies 32,500 3,200-35,700 35, % 11,000 11,000 Provinces and municipalities 32,500 3,200-35,700 35, % 11,000 11,000 TOTAL 67,026 3,644-70,670 50,254 20, % 19,961 19, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

147 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March / /16 Programme 4: TRADITIONAL INSTITUTIONAL MANAGEMENT Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation Expenditure Sub programme R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R Traditional Institutional Admin 4,850 (320) - 4,530 4, % 4,051 4, Traditional Resource Admin 3,756 (92) - 3,664 3, % 1, Development Facilitation % Traditional Land Admin 1, ,770 1, % 1,409 1,347 Total of Sub programme 10, ,414 10, % 7,248 6,802 Current payments 10, ,414 10, % 7,248 6,802 Compensation of employees 5, ,195 5, % 4,948 4,515 Salaries and wages 4, ,540 4, % 4,232 3,934 Social contributions 727 (72) % Goods and services 5, ,219 4, % 2,300 2,287 Administrative fees Advertising Minor assets Catering: Departmental activities ,108 1, % Legal services % - - Agency and support / outsourced services 3,254 (2,554) % 744 1,296 Consumable supplies % 1 - Consumable: Stationery, printing and office supplies 380 (305) (43) 157.3% Travel and subsistence % Training and development 348 (260) % Venues and facilities 509 1,977-2,486 2, % TOTAL 10, ,414 10, % 7,248 6,802 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

148 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Traditional Institutional Administration 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 4,850 (320) - 4,530 4, % 4,051 4,393 Compensation of employees 2,881 (320) - 2,561 2, % 2,212 2,552 Goods and services 1, ,969 1, % 1,839 1,841 TOTAL 4,850 (320) - 4,530 4, % 4,051 4, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

149 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Traditional Resource Administration 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 3,756 (92) - 3,664 3, % 1, Compensation of employees 937 (53) % 1, Goods and services 2,819 (39) - 2,780 2, % TOTAL 3,756 (92) - 3,664 3, % 1, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

150 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Rural Development Facilitation 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments % Compensation of employees Goods and services % TOTAL % Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

151 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Traditional Land Administration 2016/ /16 Adjusted Appropriation Shifting of Funds Virement Final Appropriation Expenditure Variance Expenditure as % of final appropriation Final Appropriation expenditure Economic classification R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 Current payments 1, ,770 1, % 1,409 1,347 Compensation of employees 1, ,750 1, % 1,389 1,329 Goods and services % TOTAL 1, ,770 1, % 1,409 1,347 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

152 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE APPROPRIATION STATEMENT for the year ended 31 March Detail of transfers and subsidies as per Appropriation Act (after Virement): Detail of these transactions can be viewed in the note on Transfers and subsidies, disclosure notes and Annexure 1 (A-H) to the Annual Financial Statements. 2. Detail of specifically and exclusively appropriated amounts voted (after Virement): Detail of these transactions can be viewed in note 1 (Annual Appropriation) to the Annual Financial Statements. 3. Detail on payments for financial assets Detail of these transactions per programme can be viewed in the note on Payments for financial assets to the Annual Financial Statements. 4. Explanations of material variances from Amounts Voted (after Virement): 4.1 Per programme Final Appropriation Expenditure Variance R 000 Variance as a % of final appropriation Programme 1: Administration 123, ,292 3,571 97% Programme 2: Local Governance 203, ,722 6,369 97% Programme 3: Development and Planning 179, ,805 50,290 72% Programme 4: Traditional Institutional Management 10,414 10, % TOTAL 516, ,876 60,587 88% 152 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

153 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE APPROPRIATION STATEMENT for the year ended 31 March Per economic classification Final Appropriation Expenditure Variance Variance as a % of final appropriation R 000 R 000 R 000 R 000 Current payments 409, ,180 40, % Compensation of employees 281, ,335 5,964 98% Goods and services 128,432 93,845 34,587 73% Transfers and subsidies Provinces and municipalities 49,613 49, % Households 1,248 1, % Payments for capital assets Buildings and other fixed structures 35,700 31,600 4,100 89% Machinery and equipment 20,105 4,169 15,936 21% Payments for financial assets % TOTAL 516, ,876 60,587 88% Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

154 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 APPROPRIATION STATEMENT for the year ended 31 March Per conditional grant Final Appropriation Expenditure Variance Variance as a % of final appropriation R 000 R 000 R 000 R 000 EPWP Grant for the creation of Job Opportunities 2,000 2, % 154 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

155 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 STATEMENT OF FINANCIAL PERFORMANCE for the year ended 31 March 2017 Note 2016/ /16 R 000 R 000 REVENUE Annual appropriation 1 516, ,577 Departmental revenue 2 1, TOTAL REVENUE 518, ,935 EXPENDITURE Current expenditure Compensation of employees 3 275, ,479 Goods and services 4 93,845 69,077 Total current expenditure 369, ,556 Transfers and subsidies Transfers and subsidies 6 50,861 50,659 Total transfers and subsidies 50,861 50,659 Expenditure for capital assets Tangible assets 7 35,769 1,170 Total expenditure for capital assets 35,769 1,170 Payments for financial assets TOTAL EXPENDITURE 455, ,888 SURPLUS/(DEFICIT) FOR THE YEAR 62,315 38,047 Reconciliation of Net Surplus/(Deficit) for the year Voted funds 60,587 37,689 Annual appropriation 60,587 37,689 Conditional grants - Departmental revenue and NRF Receipts 12 1, SURPLUS/(DEFICIT) FOR THE YEAR 62,315 38,047 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

156 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 STATEMENT OF FINANCIAL POSITION for the year ended 31 March 2017 Note 2016/ /16 ASSETS R 000 R 000 Statement of Financial Position Current assets 60,867 37,810 Unauthorised expenditure Cash and cash equivalents 9 60,587 37,689 Receivables TOTAL ASSETS 60,867 37,810 LIABILITIES Current liabilities 60,686 37,770 Voted funds to be surrendered to the Revenue Fund 11 60,587 37,690 Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund Payables Non-current liabilities Payables - - TOTAL LIABILITIES 60,686 37,770 NET ASSETS Note 2016/ /16 R 000 R 000 Represented by: Capitalisation reserve - - Recoverable revenue TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

157 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 STATEMENT OF CHANGES IN NET ASSET for the year ended 31 March / /16 R 000 R 000 Recoverable revenue Opening balance Transfers: Debts recovered (included in departmental receipts) Debts raised Closing balance TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

158 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 CASH FLOW STATEMENT for the year ended 31 March 2017 Note 2016/ /16 R 000 R 000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts 518, ,935 Annual appropriated funds received , ,577 Statutory appropriated funds received - - Departmental revenue received 2 1, Net (increase)/decrease in working capital (166) 382 Surrendered to Revenue Fund (39,392) (57,496) Surrendered to RDP Fund/Donor - - Current payments (369,180) (316,556) Payments for financial assets (66) (503) Transfers and subsidies paid (50,861) (50,659) Net cash flow available from operating activities 14 58,526 (17,897) CASH FLOWS FROM INVESTING ACTIVITIES Payments for capital assets 7 (35,769) (1,170) Proceeds from sale of capital assets - - Net cash flows from investing activities (35,769) (1,170) CASH FLOWS FROM FINANCING ACTIVITIES Increase/(decrease) in net assets Increase/(decrease) in non-current payables - - Net cash flows from financing activities Net increase/(decrease) in cash and cash equivalents 22,898 (19,037) Cash and cash equivalents at beginning of period 37,689 56,726 Unrealised gains and losses within cash and cash equivalents Cash and cash equivalents at end of period 15 60,587 37, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

159 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ACCOUNTING POLICIES for the year ended 31 March Detail of transfers and subsidies as per Appropriation Act (after Virement): Summary of significant accounting policies The financial statements have been prepared in accordance with the following policies, which have been applied consistently in all material aspects, unless otherwise indicated. Management has concluded that the financial statements present fairly the department s primary and secondary information. The historical cost convention has been used, except where otherwise indicated. Management has used assessments and estimates in preparing the annual financial statements. These are based on the best information available at the time of preparation. Where appropriate and meaningful, additional information has been disclosed to enhance the usefulness of the financial statements and to comply with the statutory requirements of the Public Finance Management Act (PFMA), Act 1 of 1999 (as amended by Act 29 of 1999), and the Treasury Regulations issued in terms of the PFMA and the annual Division of Revenue Act. 1. Basis of preparation The financial statements have been prepared in accordance with the Modified Cash Standard. 2 Going concern The financial statements have been prepared on a going concern basis. 3 Presentation currency Amounts have been presented in the currency of the South African Rand (R), which is also the functional currency of the department. 4 Rounding Unless otherwise stated financial figures have been rounded to the nearest one thousand Rand (R 000). 5 Foreign currency translation Cash flows arising from foreign currency transactions are translated into South African Rands using the spot exchange rates prevailing at the date of payment / receipt. 6 Comparative information 6.1 Prior period comparative information Prior period comparative information has been presented in the current year s financial statements. Where necessary figures included in the prior period financial statements have been reclassified to ensure that the format in which the information is presented is consistent with the format of the current year s financial statements. 6.2 Current year comparison with budget A comparison between the approved, final budget and actual amounts for each programme and economic classification is included in the appropriation statement. 7 Revenue 7.1 Appropriated funds Appropriated funds comprises of departmental allocations as well as direct charges against the revenue fund (i.e. statutory appropriation). Appropriated funds are recognised in the statement of financial performance on the date the appropriation Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

160 becomes effective. Adjustments made in terms of the adjustments budget process are recognised in the statement of financial performance on the date the adjustments become effective. The net amount of any appropriated funds due to / from the relevant revenue fund at the reporting date is recognised as a payable / receivable in the statement of financial position. 7.2 Departmental revenue Departmental revenue is recognised in the statement of financial performance when received and is subsequently paid into the relevant revenue fund, unless stated otherwise. Any amount owing to the relevant revenue fund at the reporting date is recognised as a payable in the statement of financial position. 7.3 Accrued departmental revenue Accruals in respect of departmental revenue (excluding tax revenue) are recorded in the notes to the financial statements when: it is probable that the economic benefits or service potential associated with the transaction will flow to the department; and The amount of revenue can be measured reliably. The accrued revenue is measured at the fair value of the consideration receivable. Accrued tax revenue (and related interest and / penalties) is measured at amounts receivable from collecting agents. Write-offs are made according to the department s debt write-off policy 8 Expenditure 8.1 Compensation of employees Salaries and wages Salaries and wages are recognised in the statement of financial performance on the date of payment Social contributions Social contributions made by the department in respect of current employees are recognised in the statement of financial performance on the date of payment. Social contributions made by the department in respect of ex-employees are classified as transfers to households in the statement of financial performance on the date of payment. 8.2 Other expenditure Other expenditure (such as goods and services, transfers and subsidies and payments for capital assets) is recognised in the statement of financial performance on the date of payment. The expense is classified as a capital expense if the total consideration paid is more than the capitalisation threshold. 8.3 Accruals and payables not recognised Accruals and payables not recognised are recorded in the notes to the financial statements when the goods are received or, in the case of services, when they are rendered to the department or in the case of transfers and subsidies when they are due and payable. Accruals and payables not recognised are measured at cost. 8.4 Leases DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ACCOUNTING POLICIES for the year ended 31 March Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

161 8.4.1 Operating leases Operating lease payments made during the reporting period are recognised as current expenditure in the statement of financial performance on the date of payment. The operating lease commitments are recorded in the notes to the financial statements Finance leases Finance lease payments made during the reporting period are recognised as capital expenditure in the statement of financial performance on the date of payment. The finance lease commitments are recorded in the notes to the financial statements and are not apportioned between the capital and interest portions. Finance lease assets acquired at the end of the lease term are recorded and measured at the lower of: cost, being the fair value of the asset; or The sum of the minimum lease payments made, including any payments made to acquire ownership 9 Aid Assistance at the end of the lease term, excluding interest. 9.1 Aid assistance received Aid assistance received in cash is recognised in the statement of financial performance when received. In-kind aid assistance is recorded in the notes to the financial statements on the date of receipt and is measured at fair value. Aid assistance not spent for the intended purpose and any unutilised funds from aid assistance that are required to be refunded to the donor are recognised as a payable in the statement of financial position. 9.2 Aid assistance paid Aid assistance paid is recognised in the statement of financial performance on the date of payment. Aid assistance payments made prior to the receipt of funds are recognised as a receivable in the statement of financial position. 10 Cash and cash equivalents Cash and cash equivalents are stated at cost in the statement of financial position. Bank overdrafts are shown separately on the face of the statement of financial position as a current liability. For the purposes of the cash flow statement, cash and cash equivalents comprise cash on hand, deposits held, other short-term highly liquid investments and bank overdrafts. 11 Prepayments and advances Prepayments and advances are recognised in the statement of financial position when the department receives or disburses the cash. Prepayments and advances are initially and subsequently measured at cost. 12 Loans and receivables Loans and receivables are recognised in the statement of financial position at cost plus accrued interest, where interest is charged, less amounts already settled or written-off. Write-offs are made according to the department s write-off policy. 13 Investments Investments are recognised in the statement of financial position at cost. 14 Financial assets DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ACCOUNTING POLICIES for the year ended 31 March 2017 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

162 14.1 Financial assets (not covered elsewhere) A financial asset is recognised initially at its cost plus transaction costs that are directly attributable to the acquisition or issue of the financial. At the reporting date, a department shall measure its financial assets at cost, less amounts already settled or written-off, except for recognised loans and receivables, which are measured at cost plus accrued interest, where interest is charged, less amounts already settled or written-off Impairment of financial assets Where there is an indication of impairment of a financial asset, an estimation of the reduction in the recorded carrying value, to reflect the best estimate of the amount of the future economic benefits expected to be received from that asset, is recorded in the notes to the financial statements. 15 Payables Loans and payables are recognised in the statement of financial position at cost. 16 Capital Assets DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ACCOUNTING POLICIES for the year ended 31 March Immovable capital assets Immovable capital assets are initially recorded in the notes to the financial statements at cost. Immovable capital assets acquired through a non-exchange transaction are measured at fair value as at the date of acquisition. Where the cost of immovable capital assets cannot be determined reliably, the immovable capital assets are measured at fair value for recording in the asset register. Immovable capital assets are subsequently carried at cost and are not subject to depreciation or impairment. Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project unless the immovable asset is recorded by another department in which case the completed project costs are transferred to that department Movable capital assets Movable capital assets are initially recorded in the notes to the financial statements at cost. Movable capital assets acquired through a non-exchange transaction is measured at fair value as at the date of acquisition. Where the cost of movable capital assets cannot be determined reliably, the movable capital assets are measured at fair value and where fair value cannot be determined; the movable assets are measured at R1. All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R1. Movable capital assets are subsequently carried at cost and are not subject to depreciation or impairment. Biological assets are subsequently carried at fair value.] Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project unless the movable asset is recorded by another department/entity in which case the completed project costs are transferred to that department Intangible assets Intangible assets are initially recorded in the notes to the financial statements at cost. Intangible assets acquired through a non-exchange transaction are measured at fair value as at the date of acquisition. Internally generated intangible assets are recorded in the notes to the financial statements when the department commences the development phase of the project. Where the cost of intangible assets cannot be determined reliably, the intangible capital assets are measured at fair value and where fair value cannot be determined; the intangible assets are measured at R1. All assets acquired prior to 1 April 2002 (or a later date as approved by the OAG) may be recorded at R Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

163 Intangible assets are subsequently carried at cost and are not subject to depreciation or impairment. Subsequent expenditure that is of a capital nature is added to the cost of the asset at the end of the capital project unless the intangible asset is recorded by another department/entity in which case the completed project costs are transferred to that department. 17 Provisions and Contingents 17.1 Provisions Provisions are recorded in the notes to the financial statements when there is a present legal or constructive obligation to forfeit economic benefits as a result of events in the past and it is probable that an outflow of resources embodying economic benefits or service potential will be required to settle the obligation and a reliable estimate of the obligation can be made. The provision is measured as the best estimate of the funds required to settle the present obligation at the reporting date Contingent liabilities Contingent liabilities are recorded in the notes to the financial statements when there is a possible obligation that arises from past events, and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not within the control of the department or when there is a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation or the amount of the obligation cannot be measured reliably Contingent assets Contingent assets are recorded in the notes to the financial statements when a possible asset arises from past events, and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the department Commitments Commitments (other than for transfers and subsidies) are recorded at cost in the notes to the financial statements when there is a contractual arrangement or an approval by management in a manner that raises a valid expectation that the department will discharge its responsibilities thereby incurring future expenditure that will result in the outflow of cash. 18 Unauthorised expenditure Unauthorised expenditure is recognised in the statement of financial position until such time as the expenditure is either: approved by Parliament or the Provincial Legislature with funding and the related funds are received; or DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ACCOUNTING POLICIES for the year ended 31 March 2017 approved by Parliament or the Provincial Legislature without funding and is written off against the appropriation in the statement of financial performance; or transferred to receivables for recovery. Unauthorised expenditure is measured at the amount of the confirmed unauthorised expenditure. 19 Fruitless and wasteful expenditure Fruitless and wasteful expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the total value of the fruitless and or wasteful expenditure incurred. Fruitless and wasteful expenditure is removed from the notes to the financial statements when it is resolved or transferred to receivables for recovery. Fruitless and wasteful expenditure receivables are measured at the amount that is expected to be recoverable and are de-recognised when settled or subsequently written-off as irrecoverable. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

164 20 Irregular expenditure DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ACCOUNTING POLICIES for the year ended 31 March 2017 Irregular expenditure is recorded in the notes to the financial statements when confirmed. The amount recorded is equal to the value of the irregular expenditure incurred unless it is impracticable to determine, in which case reasons therefor are provided in the note. Irregular expenditure is removed from the note when it is either condoned by the relevant authority, transferred to receivables for recovery or not condoned and is not recoverable. Irregular expenditure receivables are measured at the amount that is expected to be recoverable and are derecognised when settled or subsequently written-off as irrecoverable. 21 Changes in accounting policies, accounting estimates and errors Changes in accounting policies that are affected by management have been applied retrospectively in accordance with MCS requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the change in policy. In such instances, the department shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable. Changes in accounting estimates are applied prospectively in accordance with MCS requirements. Correction of errors is applied retrospectively in the period in which the error has occurred in accordance with MCS requirements, except to the extent that it is impracticable to determine the period-specific effects or the cumulative effect of the error. In such cases, the department shall restate the opening balances of assets, liabilities and net assets for the earliest period for which retrospective restatement is practicable. 22 Events after the reporting date Events after the reporting date that are classified as adjusting events have been accounted for in the financial statements. The events after the reporting date that are classified as non-adjusting events after the reporting date have been disclosed in the notes to the financial statements. 23 Departures from the MCS requirements The Annual Financial Statements have been prepared in accordance with the modified cash basis of accounting The Annual Financial Statements is free from material misstatements, including omissions All amounts appearing on the Annual Financial Statements have been cast and cross-cast 24 Capitalisation reserve The capitalisation reserve comprises of financial assets and/or liabilities originating in a prior reporting period but which are recognised in the statement of financial position for the first time in the current reporting period. Amounts are recognised in the capitalisation reserves when identified in the current period and are transferred to the National/Provincial Revenue Fund when the underlying asset is disposed and the related funds are received. 25 Recoverable revenue Amounts are recognised as recoverable revenue when a payment made in a previous financial year becomes recoverable from a debtor in the current financial year. Amounts are either transferred to the National/Provincial Revenue Fund when recovered or are transferred to the statement of financial performance when written-off. 26 Related party transactions A related party transaction is a transfer of resources, services or obligations between the reporting entity and a related party. Related party transactions within the Minister/MEC s portfolio are recorded in the notes to the financial statements when the transaction is not at arm s length. Key management personnel are those persons having the authority and responsibility for planning, directing 164 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

165 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ACCOUNTING POLICIES for the year ended 31 March 2017 and controlling the activities of the department. The number of individuals and their full compensation is recorded in the notes to the financial statements. 27 Inventories (Effective from date determined in a Treasury Instruction) At the date of acquisition, inventories are recorded at cost price in the statement of financial performance. Where inventories are acquired as part of a non-exchange transaction, the cost of inventory is its fair value at the date of acquisition. Inventories are subsequently measured at the lower of cost and net realisable value or the lower of cost and current replacement value. Subsequent measurement of the cost of inventory is determined on the weighted average basis. 28 Public-Private Partnerships Public Private Partnerships are accounted for based on the nature and or the substance of the partnership. The transaction is accounted for in accordance with the relevant accounting policies. A summary of the significant terms of the PPP agreement, the parties to the agreement, and the date of commencement thereof together with the description and nature of the concession fees received, the unitary fees paid, rights and obligations of the department are recorded in the notes to the financial statements. 29 Employee benefits The value of each major class of employee benefit obligation (accruals, payables not recognised and provisions) is disclosed in the Employee benefits note. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

166 1. Annual Appropriation 1.1 Annual Appropriation DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 Included in the annual appropriation are funds appropriated in terms of the Appropriation Act and the Adjustment Appropriation Act, these include conditional grant from national allocations (Voted funds) and equitable share from provincial allocations 2016/ /16 Final Appropriation Funds Received Funds not requested/ not received Final Appropriation Appropriation received Programmes R 000 R 000 R 000 R 000 R 000 Programme: 1 Administration 123, , , ,354 Programme: 2 Local Governance Programme: 3 Development Planning Programme: 4 Traditional Institutional Management 203, , , , , ,095-78,642 78,642 10,414 10,414-7,248 7,248 TOTAL 516, , , ,577 All funds were requested in cash and availed as such by the Provincial Treasury 1.2 Conditional grants 2016/ /16 R 000 R 000 Total grants received 2,000 - Provincial grants included in Total Grants received 2,000 - All conditional Grants received from the National Department of Public Works were for Extended Public Works Programme and have been transferred to four local municipalities for the creation of job opportunities within their communities namely: Westonaria Local Municipality Randfontein Local Municipality Merafong Local Municipality Lesedi Local Municipality 166 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

167 2. Departmental revenue DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Tax revenue Sales of goods and services other than capital assets Transactions in financial assets and liabilities 1, Transfer received - - Total revenue collected 1, Less: Own revenue included in appropriation - - Departmental revenue collected 1, The over collection on Departmental Revenue was as a result of funds surrendered by the City of Tshwane as unspent grants previously allotted to the city but not used or not used in accordance with conditions of transfers. The funds in question were transferred to the city over four years ago and the city applied for rollover more than three times hence the application for rollover was declined during the reporting period. 2.1 Sales of goods and services other than capital assets 2016/ /16 R 000 R 000 Sales of goods and services produced by the department Sales by market establishment TOTAL The sales of goods and services other than capital assets include sale of tender documents, fees for parking and commission on collection of funds on behalf of third parties from the payroll 2.2 Transactions in financial assets and liabilities 2016/ /16 R 000 R 000 Additional Revenue ly Received 1, TOTAL 1, Included in additional revenue actually received is R1.2 million from the City of Tshwane and interest received from outstanding staff debts. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

168 3. Compensation of employees 3.1 Salaries and Wages DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Basic salary 183, ,284 Performance award 6,467 3,212 Service Based Compensative/circumstantial 8,803 7,065 Periodic payments Other non-pensionable allowances 38,022 33,984 TOTAL 237, ,016 Compensation of employees includes all payments and benefits paid to employees in remuneration of their labour and skills. The increase in compensation of employee was as result of annual inflationary adjustment, annual progression salary increases, performance bonuses awarded to deserving employee on level 3 to 12, and bonuses awarded to some of the senior managers. 3.2 Social contributions 2016/ /16 R 000 R 000 Employer contributions Pension 23,933 21,740 Medical 13,748 13,675 Bargaining council TOTAL 37,731 35,463 Total compensation of employees 275, ,479 Average number of employees Social contributions include the Department`s contributions for the benefits of employees. The Department also reported a slight reduction in number of employees resulting from resignations. 168 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

169 4. Goods and services DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Administrative fees Advertising 14,062 7,343 Minor assets Bursaries (employees) Catering 2,622 3,837 Communication 7,671 10,419 Computer services 5, Consultants: Business and advisory services Legal services 3, Contractors Agency and support / outsourced services 8,751 10,968 Entertainment Audit cost external 2,627 2,966 Fleet services 8,304 6,069 Inventory - - Consumables 20,613 9,591 Housing - - Operating leases Property payments 1,094 1,146 Transport provided as part of the departmental activities - - Travel and subsistence 5,700 5,281 Venues and facilities 6,779 4,983 Training and development 3,207 2,923 Other operating expenditure TOTAL 93, ,077 Expenditure on goods and service include all expenses actually incurred and paid for, during the reporting period the Department did not pay for any expenditure in advance. The expenditure on goods and service increased by more than one third due to the following reasons: Advertising due to local government voter education campaigns undertaken by the department in and around local government elections in August Minor Assets that were procured for Urban Search and Rescue (USAR) accreditation that took place in February Bursaries as result of increase in number applicants and bursary awarded. Computer service as a result of payment of outstanding licence fees from Microsoft for the previous financial year and the current. Consultant as result of the establishment of Reduction of Red Tape Commission. Legal service due to payment of invoices from the Department of Justice and Constitutional Development from previous financial years. Fleet services for additional vehicles for the Provincial Disaster Centre. Consumable due to relief material procured for the victims of the flash floods in December 2016 and January 2017 Operating leases as result of payment of invoices for office automation. Travel and Subsistence as a result of additional international travelling for study tours. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

170 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Minor assets 2016/ /16 R 000 R 000 Tangible assets Buildings and other fixed structures - - Machinery and equipment Intangible assets - TOTAL Included, as minor assets, are office furniture and office equipment, which are R or less for the execution of duties by staff members. 4.2 Computer services 2016/ /16 R 000 R 000 SITA computer services 3,258 - External computer service providers 2, TOTAL 5, Included in Computer Services are payment to State Information Technology Agency (SITA) for a cloud service and licences for Microsoft products. 4.3 Audit cost External 2016/ /16 R 000 R 000 Regularity audits 2,627 2,865 Performance audits Investigations - - TOTAL 2,627 2,966 Audit fees include payments made to the Auditor General for audit services on the regulatory audit performed during the 2015/16 financial year and preparation for the same service on the 2016/17 financial year. 170 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

171 4.4 Consumables DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Consumable supplies 15,945 6,198 Uniform and clothing 905 1,079 Household supplies 3, Building material and supplies 2,028 - IT consumables 1,617 1,963 Other consumables 7,581 2,249 Stationery, printing and office supplies 4,668 3,393 TOTAL 20,613 9,591 Other consumables include emergency mattresses, tents, and crockery and corrugated iron structures procured for the flood victims around the Gauteng Province where the disaster was declared by the Premier during the reporting period. 4.5 Property payments 2016/ /16 R 000 R 000 Property management fees Property maintenance and repairs TOTAL 1,094 1,146 Property payments Includes transactions that are related to the maintenance of the building including transfer costs for the new building procured for the Provincial Disaster Management Centre. 4.6 Travel and subsistence 2016/ /16 R 000 R 000 Local 3,794 4,543 Foreign 1, TOTAL 5,700 5,281 Travel and Subsistence includes foreign trips undertaken by the Officials of the Department for study tours. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

172 4.7 Other operating expenditure DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Professional bodies, membership and subscription fees 15 6 Resettlement costs Other TOTAL Other includes expenditure incurred for transactions for subsidy for insurance premiums of subsidies vehicles of employees. 5. Payments for financial assets 2016/ /16 R 000 R 000 Debts written off TOTAL Numerous debts of former and late staff members were written-off during the reporting period due to death and non-recoverability. 5.1 Debts written off 2016/ /16 R 000 R 000 Nature of debts written off Staff debt for deceased employees SARS interest written off Total TOTAL DEBT WRITTEN OFF Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

173 6. Transfers and subsidies DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Provinces and municipalities 49,613 48,988 Households 1,248 1,671 TOTAL 50,861 50,659 During the reporting period the Department made the following transfers to the municipalities: 1. R3 million to municipalities for support to comply with GRAP 17 in the following order. Westonaria Local Municipality R Randfontein Local Municipality R Merafong Local Municipality R Lesedi Local Municipality R R2 million to municipalities for the automation of Performance Management System in the following order: Randfontein Local Municipality R R2 million to municipalities for the Extended Public Works Programme in the following order: Westonaria Local Municipality R Randfontein Local Municipality R Merafong Local Municipality R Lesedi Local Municipality R R3.3 million to the municipalities for verification of electricity account and metering and the maintenance of water infrastructure project in the following order: Emfuleni R R14 million to Emfuleni local municipality for installation of the new waste pump. 6. R16 million to the Rand West Municipality for installation of a new bulk and internal electrical network infrastructure. 7. R to Merafong Local Municipality for the procurement of the service of a water tanker. 8. R3.2 million to Rand West Local Municipality and R5.5 million to West Rand District Municipality for the transformation on rationalisation and alignment of municipal policies for the merger or former Randfontein Local Municipality and Westonaria Local Municipality. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

174 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Expenditure for capital assets 2016/ /16 R 000 R 000 Tangible assets 35,769 1,170 Buildings and other fixed structures 31,600 - Machinery and equipment 4,169 1,170 TOTAL 35,769 1,170 Included in the payment for capital assets is payment made to the Department of Infrastructure Development for procurement of a building for Provincial Disaster Management Centre. 7.1 Analysis of funds utilised to acquire capital assets 2016/ / /16 R 000 R 000 Tangible assets 35,769 35,769 Buildings and other fixed structures 31,600 31,600 Machinery and equipment 4,169 4,169 TOTAL 35,769 35, Analysis of funds utilised to acquire capital assets 2015/ / /16 R 000 R 000 Tangible assets 1,170 1,170 Machinery and equipment 1,170 1,170 TOTAL 1,170 1, Unauthorised expenditure 8.1 Reconciliation of unauthorised expenditure The department did not incur any unauthorised expenditure in the 2016/17 financial year. 174 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

175 9. Cash and cash equivalents DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Consolidated Paymaster General Account 60,617 37,689 Disbursements (30) TOTAL 60,587 37,689 The consolidated paymaster general account reflects balance of cash in the bank account of the Department on the last day of the reporting period. 10. Receivables Recoverable expenditure Staff debt 2016/ /16 Current Non-current Total Current Non-current Total R 000 R 000 R 000 R 000 R 000 R TOTAL Staff debt includes funds for leave without pay, bursary debts and partial overpayments for deceased staff members prior the latter being written off Recoverable expenditure (disallowance accounts) 2016/ /16 R 000 R 000 Sal: Recoverable - 9 Sal: Medical Aid - 8 TOTAL Staff debt 2016/ /16 R 000 R 000 Debt Account TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

176 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Voted funds to be surrendered to the Revenue Fund 2016/ /16 R 000 R 000 Opening balance 37,690 57,137 Prior period error - - As restated 37,690 57,137 Transfer from statement of financial performance (as restated) 60,587 37,689 Paid during the year (37,690) (57,136) CLOSING BALANCE 60,587 37,690 The funds to be surrendered to the Provincial Revenue Fund are composed as follows: Compensation of Employees: R Goods and Services: R Capital Assets: R Included in the capital assets are the funds earmarked for the procurement of the C4 system and the Mobile Unit from Denel to an amount of R12.2 million, the amount for designing and equipping the Provincial Disaster Management Centre to the value of R4.1 million and the amount for the settlement of the tools of trade for R2 million respectively. The Department will request a rollover of these funds to the next financial year since some were committed on either contracts or order. 12. Departmental revenue and NRF Receipts to be surrendered to the Revenue Fund 2016/ /16 R 000 R 000 Opening balance Prior period error - - As restated Transfer from Statement of Financial Performance (as restated) 1, Paid during the year (1,702) (360) CLOSING BALANCE Payables current 2016/ /16 R 000 R 000 Other payables TOTAL Other payables comprise of funds as credits amounts on the Persal system, which is awaiting conversion from V4 to V5 system and funds to be paid over to South African Revenue Services. 176 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

177 13.1 Other payables DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Sal: ABC recalls 2 28 Sal: PERSAL EBT control account 41 - Sal: Pension Fund - 3 Sal: Income Tax 1 20 TOTAL Net cash flow available from operating activities 2016/ /16 R 000 R 000 Net surplus as per Statement of Financial Performance 62,315 38,047 Add back non cash/cash movements not deemed operating activities (3,789) (55,944) (Increase)/decrease in receivables current (159) 20,290 (Increase)/decrease in prepayments and advances - 9 Decrease in payables current (7) (19,917) Expenditure on capital assets 35,769 1,170 Surrenders to Revenue Fund (39,392) (57,496) NET CASH FLOW GENERATED BY OPERATING ACTIVITIES 58,526 (17,897) 15. Reconciliation of cash and cash equivalents for cash flow purposes 2016/ /16 R 000 R 000 Consolidated Paymaster General account 60,617 37,689 Disbursements (30) TOTAL 60,587 37,689 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

178 16. Contingent liabilities and contingent assets 16.1 Contingent liabilities DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R 000 Liable to Nature Housing loan guarantees Employees Claims against the department - 1,150 TOTAL 21 1,171 The housing guarantee relates to the guarantee issued by the Department for staff members to third parties. These guarantee the third party, mostly the bank that the Department will assume the first risk of up to 30% in the event of the benefiting staff member defaulting on their payments. 17. Commitments 2016/ /16 R 000 R 000 Current expenditure Approved and contracted 16,907 3,570 Approved but not yet contracted 4,521 1,374 21,428 4,944 Capital expenditure Approved and contracted 4,838 - Sub Total 4,838 - TOTAL COMMITMENTS 26,266 4,944 Commitments include orders issued and contracts entered into, which were not fully executed at the last day of the reporting period. Most of the commitments as compared to the prior year relates to contracts and orders for projects that were concluded but not settled during the reporting period and the procurement of corrugated iron structures for the victims of floods. All these commitments including the capital commitments are no longer that one (1) year. 178 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

179 18. Accruals and payables not recognised 18.1 Accruals DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March / /16 R 000 R Days 30+ Days Total Total Listed by economic classification Goods and services 6,624-6,624 3,680 Capital assets TOTAL 6,624-6,624 3, / /16 Listed by programme level R 000 Programme 1: Administration 1,769 2,962 Programme 2: Local Governance Programme 3: Development Planning 3, Programme 4: Traditional Institutional Management TOTAL 6,624 3,896 Included in the accruals are invoices for the procurement and payment for temporary accommodation facilities for the victims of floods under programme three Payables not recognised 2016/ /16 R 000 R Days 30+ Days Total Total Listed by economic classification Goods and services TOTAL / /16 Listed by programme level R 000 Programme 1: Administration TOTAL Included in the above totals are the following: 2016/ /16 Confirmed balances with other departments Annex Confirmed balances with other government entities Annex 5 TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

180 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 Payables not recognised relates to the services rendered by the Department of Justice for litigation cases including an outstanding payment for G-FLEET on the confirmed balances. 19. Employee benefits Note 2016/ /16 R 000 R 000 Leave entitlement 16,898 13,150 Service bonus (Thirteenth cheque) 7,339 7,027 Performance awards (Provisions) 4,219 3,212 Capped leave commitments 2,559 2,388 Other TOTAL 31,144 26,177 An amount of R credit is included to the leave entitlement, other employee benefits includes R for long service bonus. The increase on capped leave compared to the prior year is as result of salary notch increases. Estimates on Performance bonus awards are calculation of 1.5 percent of the Department s compensation budget (281,299 x 1.5% = 4,219 million) 20. Lease commitments 20.1 Operating leases expenditure 2016/17 Specialised Buildings and military equipment Land other fixed structures Machinery and equipment Total Not later than 1 year ,221 3,221 Later than 1 year and not later than 5 years ,339 3,339 Later than five years TOTAL LEASE COMMITMENTS ,560 6, /16 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Total Not later than 1 year ,586 2,586 Later than 1 year and not later than 5 years TOTAL LEASE COMMITMENTS ,941 2,941 5,527 5,527 The operating leases relate to leased vehicles from G-Fleet for the duration of the leased term. 180 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

181 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Finance leases expenditure 2016/17 Specialised Buildings and military equipment Land other fixed structures Machinery and equipment Total Not later than 1 year ,965 5,965 Later than 1 year and not later than 5 years TOTAL LEASE COMMITMENTS ,421 14, ,386 20, /16 Specialised military equipment Land Buildings and other fixed structures Machinery and equipment Total Not later than 1 year ,957 3,957 Later than 1 year and not later than 5 years TOTAL LEASE COMMITMENTS ,268 3,268 7,225 7,225 Included in the finance leases are cell phone contracts, which at various stages ranging from 1 to 2 years, as well as tools of trade procured for the community development workers. 21. Irregular expenditure 21.1 Reconciliation of irregular expenditure Note 2016/ /16 R 000 R 000 Opening balance 3,485 3,401 As restated 3,485 3,401 Add: Irregular expenditure relating to current year 2, Less: Prior year amounts condoned (1,348) - CLOSING BALANCE 4,792 3,485 Analysis of awaiting condonation per age classification Current year 2, Prior years 2,137 3,401 TOTAL 4,792 3,485 Irregular expenditure for current year has increased by R2.6 million as result of non-compliance with procurement processes. Investigations are currently on to determine the circumstances and reasons behind non-compliance. During the same reporting period, irregular expenditure to an amount of R1.3 million was condoned. Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

182 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Details of irregular expenditure added current year (relating to current and prior years) Incident Disciplinary steps taken/criminal proceedings 2016/17 R 000 Maintenance No Compliance with procurement processes 15 Advertising No Compliance with procurement processes 219 Travel and accommodation No Compliance with procurement processes 179 Furniture No Compliance with procurement processes 853 Advertising No Compliance with procurement processes 1,006 Operating Leases No Compliance with procurement processes 187 Operating Leases No Compliance with procurement processes 160 Operating Leases No Compliance with procurement processes 36 TOTAL 2, Details of irregular expenditure condoned Incident Condoned by (condoning authority) 2016/17 R 000 Venues and facilities Head of Department 124 Travel Head of Department 224 Venues and facilities Head of Department 1,000 TOTAL Head of Department 1, Fruitless and wasteful expenditure 22.1 Reconciliation of fruitless and wasteful expenditure Note 2016/ /16 R 000 R 000 Opening balance As restated Less: Amounts resolved (154) - CLOSING BALANCE The Department condoned fruitless and wasteful expenditure to an amount of R during the reporting period. 182 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

183 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Analysis of awaiting resolution per economic classification 2016/ /16 R 000 R 000 Current Capital - - Transfers and subsidies TOTAL Related party transactions During the reporting period, the Department reimbursed the Department of Human Settlement a certain amount of money for cost related to telephones at the Bank of Lisbon. The Department occupies the building owned by the Department of Infrastructure Development at no cost. During the same period, the Department shared a building with Health and Human Settlement at no cost to the Department. Other related parties include all GPG Departments and entities are related parties to COGTA as Office of the Premier, Provincial Treasury, Economic Development, Health, Education, Social Development, Roads and Transport, Community Safety, Agriculture and Rural Development, Sports, Arts, Culture and Recreation and E-Government. With the exception of the above transaction, only transactions on arm s length were made with these related parties. 24. Key management personnel No. of Individuals 2016/ /16 R 000 R 000 Political office bearers (provide detail below) Member of Executive council: 1 1,911 2,135 Level 15 to ,187 7,972 Level 14 (incl. CFO if at a lower level) 9 10,390 7,708 TOTAL 21,488 17,815 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

184 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Movable Tangible Capital Assets Movement In Movable Tangible Capital Assets Per Asset Register For The Year Ended 31 March 2017 Opening Value Additions Disposal Closing balance Adjustments Balance R 000 R000 R 000 R 000 R 000 Machinery and equipment 8,099-4, ,580 Computer equipment 4, ,757 Furniture and office equipment 2,633-2, ,039 Other machinery and equipment 1, ,784 TOTAL MOVABLE TANGIBLE CAPITAL ASSETS 8,099-4, ,580 Under disposals an amount of R relates to assets written off and amount of R relates to assets transferred to DID Additions Additions To Movable Tangible Capital Assets Per Asset Register For The Year Ended 31 March 2017 Machinery and equipment Cash Non-cash (Capital Work Received current, Total in Progress current costs and finance lease payments) not paid (Paid current year, received prior year) R 000 R 000 R 000 R 000 R 000 4, (73) 4,096 Transport assets Computer 1, (73) 933 equipment Furniture and 2, ,496 office equipment Other machinery and equipment TOTAL ADDITIONS TO MOVABLE TANGIBLE CAPITAL ASSETS 4, (73) 4, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

185 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Disposals Disposals Of Movable Tangible Capital Assets Per Asset Register For The Year Ended 31 March 2017 Sold for cash Non-cash disposal Total disposals Cash Received R 000 R 000 R 000 R 000 Machinery and equipment Transport assets Computer equipment Furniture and office equipment Other machinery and equipment TOTAL DISPOSAL OF MOVABLE TANGIBLE CAPITAL ASSETS Movement for 2016/17 Movement In Tangible Capital Assets Per Asset Register For The Year Ended 31 March 2017 Opening balance Prior period error Additions Disposals Closing Balance R 000 R 000 R 000 R 000 R 000 Machinery and equipment 6,740-1, ,099 Computer equipment 3, ,271 Furniture and office equipment 2, ,633 Other machinery and equipment 1, ,195 TOTAL MOVABLE TANGIBLE CAPITAL ASSETS 6,740-1, , Minor assets Movement In Minor Assets Per The Asset Register For The Year Ended As At 31 March 2017 Specialised Intangible Heritage Machinery Biological Total military assets assets assets and equipment assets R 000 R 000 R 000 R 000 R 000 R 000 Opening balance ,981 1,981 Value adjustments Additions Disposals (401) (401) TOTAL MINOR ASSETS ,355-2,355 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

186 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March MOVEMENT IN MINOR ASSETS PER THE ASSET REGISTER FOR THE YEAR ENDED AS AT 31 MARCH 2017 Specialised military assets Intangible assets Heritage assets Machinery and equipment Biological assets Total R 000 R 000 R 000 R 000 R 000 R 000 Opening balance ,743-1,743 Additions Disposals (40) - (40) TOTAL MINOR ASSETS ,981-1, Movable Assets Written Off Write Off Of Movable Tangible Capital Assets Per Asset Register For The Year Ended 31 March 2017 Sold for cash Non-cash disposal Total disposals Cash Received R 000 R 000 R 000 R 000 Machinery and equipment Computer equipment Furniture and office equipment Other machinery and equipment TOTAL WRITE OFF OF MOVABLE TANGIBLE CAPITAL ASSETS Movable Assets Written Off For The Year Ended As At 31 March 2017 Specialised Intangible Heritage Machinery Biological Total military assets assets assets and equipment assets R 000 R 000 R 000 R 000 R 000 R Assets written off (441) - (441) TOTAL MOVABLE (441) - (441) 186 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

187 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March S42 Movable capital assets Major Assets Subjected To Transfer In Terms Of S42 Of The PFMA - 31 March 2017 Specialised military assets Intangible assets Heritage assets Machinery and equipment Biological assets Total No. of Assets Value of the assets (R 000) Minor Assets Subjected To Transfer In Terms Of S42 Of The PFMA - 31 March 2017 Specialised Intangible Heritage Machinery Biological Total military assets assets assets and equipment assets No. of Assets Value of the assets (R 000) MEC office of Co-Operative Governance & Traditional Affairs was transferred with ICT equipment to the Department of Infrastructure Development during 2016/17 financial year. 27. Immovable Tangible Capital Assets Movement In Immovable Tangible Capital Assets Per Asset Register For The Year Ended 31 March 2017 Opening Value adjustments Additions Disposals Closing balance Balance R 000 R 000 R 000 R 000 Buildings And Other Fixed Structures ,600 31,600 - Dwellings Non-residential buildings 31,600 31,600 - Other fixed structures TOTAL IMMOVABLE TANGIBLE ,600 31,600 - Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

188 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March Additions Additions To Immovable Tangible Capital Assets Per Asset Register For The Year Ended 31 March 2017 Cash Noncash (Capital Work in Received Total Progress current costs and finance lease payments) current, not paid (paid current year received prior year) R 000 R 000 R 000 R 000 Buildings And Other Fixed Structures 31, ,600 Dwellings Non-residential buildings 31, ,600 Other fixed structures TOTAL ADDITIONS TO IMMOVABLE TANGIBLE CAPITAL ASSETS 31, , Disposals Disposals Of Immovable Tangible Capital Assets Per Asset Register For The Year Ended 31 March 2017 Sold for cash Non-cash disposal Total disposals Cash Received R 000 R 000 R 000 R 000 Buildings And Other Fixed Structures 31,600 31,600 Dwellings Non-residential buildings - 31,600 31,600 - Other fixed structures TOTAL DISPOSALS OF IMMOVABLE TANGIBLE CAPITAL ASSETS - 31,600 31, Immovable asset transferred to another DID Number of assets Value of assets R 000 Buildings And Other Fixed Structures 1 31,600 Dwellings - - Non-residential buildings 1 31, 600 Other fixed structures - - TOTAL 1 31, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

189 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 The transaction relates to the procurement of the building for the Provincial Disaster Management Centre. The property was transferred to the Department of Infrastructure as the custodian of the provincial buildings Immovable assets additional information a) Agreement of custodianship Annexure 9 Number Number Non-residential buildings Inventory Inventory [Per major category] Note Quantity 2016/17 Quantity 2015/16 R 000 R 000 Opening balance ,208 Add/(Less): Adjustments to prior year balance - - (713) (23,208) Add: Additions/Purchases - Cash Add: Additions - Non-cash (Less): Disposals (Less): Issues Add/(Less): Adjustments CLOSING BALANCE Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

190 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March STATEMENT OF CONDITIONAL GRANTS RECEIVED NAME OF DEPARTMENT GRANT ALLOCATION SPENT 2015/16 Division of Revenue Act/ Provincial Grants Roll Overs DORA Adjustments Other Adjustments Total Available Amount received by department Amount spent by department Under / (Overspending) % of available funds spent by department Division of Revenue Act Amount spent by department R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 National Public Works 2, ,000 2,000 2, % - - TOTAL 2, ,000 2,000 2, % - - It is confirmed that all the above amounts were paid to the primary bank accounts of the respective municipalities. 190 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

191 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March STATEMENT OF CONDITIONAL GRANTS AND OTHER TRANSFERS PAID TO MUNICIPALITIES NAME OF MUNICIPALITY GRANT ALLOCATION TRANSFER DoRA and other transfers Roll Overs Adjustments Total Available Transfer Funds Withheld Re-allocations by National Tr easury or National Department R 000 R 000 R 000 R 000 R 000 R 000 % Westonaria Local Municipality (GRAP 17) Randfontein Local Municipality (GRAP 17) Merafong Local Municipality (GRAP 1, ,000 1, ) Lesedi Local Municipality (GRAP 17) 1, ,000 1, Emfuleni Local Municipality (Water Infra) 3, ,384 3, Randfontein Local Municipality (PMS) 1, ,000 1, Westonaria Local Municipality (PMS) 1,000 1,000 1,000 Merafong Local Municipality (EPWP) Lesedi Local Municipality (EPWP) Westonaria Local Municipality (EPWP) Randfontein Local Municipality (EPWP) Emfuleni Local Municipality (New waste water , ,000 14, Pump station) Rand west Local Municipality (Electricity Infrastructure) Merafong Local Municipality (Water tankers) Rand west Local Municipality (Transformation) West Rand District Local Municipality (Transformation) 16, ,000 16, , ,200 3, , ,529 5, TOTAL 49, ,613 49, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

192 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 It is confirmed that all the above amounts were paid to the primary bank accounts of the respective municipalities 31. Prior period errors 31.1 Reconciliation of Net Surplus (Deficit) for the year Note 2015/16 R In 2015/16 Financial Year: The reconciliation of net surplus/deficit for the year 2015/16 was erroneously reconciled; the total annual appropriation of R instead of the net appropriation of R was disclosed. The latter has since been restated and does not result in any impact on the net surplus of R38 047, which was already disclosed in the prior year. 192 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

193 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNEXURES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 ANNEXURE 1A Unaudited Statement Of Conditional Grants And Other Transfers Paid To Municipalities NAME OF MUNICIPALITY DoRA and other transfers GRANT ALLOCATION TRANSFER SPENT 2015/16 Roll Overs Adjustments Total Available Transfer Funds Withheld Re-allocations by National Treasury or National Department Amount received by municipality Amount spent by municipality % of available funds spent by municipality Division of Revenue Act R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 % R 000 Westonaria Local Municipality (GRAP 17) Randfontein Local Municipality (GRAP 17) Merafong Local Municipality (GRAP 17) Lesedi Local Municipality (GRAP 17) Emfuleni Local Municipality (GRAP 17) Emfuleni Local Municipality (Water Infrastructure) Randfontein Local Municipality (PMS) Westonaria Local Municipality (PMS) Merafong Local Municipality (EPWP) Lesedi Local Municipality (EPWP) Westonaria Local Municipality (Mergers) Westonaria Local Municipality (EPWP) Randfontein Local Municipality (EPWP) Randfontein Local Municipality (Elect dist.) Emfuleni Local Municipality (Water supply imp Boikotsong settlement) % 1, % 1,000 1, , , % - 1, , ,000 1, % 1, ,000 3, , ,384-0% - 1, , ,000 1, % 750 1, , , % % % , % % , ,063 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

194 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNEXURES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 NAME OF MUNICIPALITY DoRA and other transfers GRANT ALLOCATION TRANSFER SPENT 2015/16 Roll Overs Adjustments Total Available Transfer Funds Withheld Re-allocations by National Treasury or National Department Amount received by municipality Amount spent by municipality % of available funds spent by municipality Division of Revenue Act R 000 R 000 R 000 R 000 R 000 R 000 % R 000 R 000 % R 000 Emfuleni Local Municipality(Infrastructure services) Emfuleni Local Municipality (New waste water ,525 14, , ,000-0% - Pump station) Rand west Local Municipality (Electricity Infrastructure) Merafong Local Municipality (Water tankers) Merafong Local Municipality (Water Loss) Rand west Local Municipality (Transformation) West Rand District Local Municipality (Transformation) 16, , ,000 8,001 50% % ,900 3, , ,200 2,670 83% - 5, , ,529 4,814 87% - TOTAL 49, , ,613 21,725 44% 48,988 It is confirmed that all the above amounts were paid to the primary bank accounts of the respective municipalities 194 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

195 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNEXURES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 ANNEXURE 1G Unaudited Statement Of Transfers To Households HOUSEHOLDS TRANSFER ALLOCATION EXPENDITURE 2015/16 Adjusted Appropriation Act Roll Overs Adjustments Total Available Transfer % of Available funds Transferred Appropriation Act R 000 R 000 R 000 R 000 R 000 % R 000 Transfers H/H Employee S/Ben: Pst Retirement Benefit Key Health Medical Scheme Germiston Municipal Ret Fund National Treasury Tshwane Municipal Pension Fund Alexander Forbes Group H/H Employee S/Ben: Injury On Duty Clinics, Drs And Compensation Commissioner ,248-1,671 Subsidies TOTAL ,248-1,671 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

196 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNEXURES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 ANNEXURE 3A Unaudited Statement Of Financial Guarantees Issued As At 31 March 2017 Local Guarantor institution Guarantee in respect of Original guaranteed capital amount Opening balance 1 April 2016 Guarantees draw downs during the year Guarantees repayments/ cancelled/ reduced/ released during the year Revaluations Closing balance 31 March 2017 Guaranteed interest for year ended 31 March 2017 Realised losses not recoverable i.e. claims paid out R 000 R 000 R 000 R 000 R 000 R 000 R 000 R 000 Motor vehicles Subtotal Housing Subtotal Other Subtotal TOTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

197 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNEXURES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 ANNEXURE 3B Unaudited Statement Of Contingent Liabilities As At 31 March 2017 Nature of Liability Opening Balance Liabilities incurred during Liabilities paid/ cancelled/reduced Liabilities recoverable Closing Balance the year during the year (Provide details hereunder) 1 April March 2017 R 000 R 000 R 000 R 000 R 000 Claims against the department Lleka Kekana V MEC (7360/14) Kekana Royal Exec Council V MEC (65343/13) Mavis Kekana V MEC (47170/13) Mahlangu V MEC Lanseria Airport V MEC Thabangu V MEC Midvaal Municipality MEC V GPSBC Tsogo Sun V MEC Subtotal 1,150-1, Environmental Liability Subtotal Other Subtotal TOTAL 1,150-1, Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

198 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNEXURES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 ANNEXURE 5 Unaudited Inter-Government Payables GOVERNMENT ENTITY Confirmed balance outstanding Unconfirmed balance outstanding TOTAL Cash in transit at year end 2016/17 31/03/ /03/ /03/ /03/ /03/ /03/2016 Payment date up to six (6) working days before year end Amount R 000 R 000 R 000 R 000 R 000 R 000 R 000 Departments Current Dept of Human Settlements Dept of Justice & Const Dev Dept of Health & Soc Development Subtotal Other Government Entity Current G-Fleet Subtotal TOTAL INTER- GOVERNMENTAL Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

199 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNEXURES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 ANNEXURE 6 Unaudited Inventories Inventory [Per major category] Note Quantity 2016/17 Quantity 2015/16 R 000 R 000 Opening balance Add/(Less): Adjustments to prior year balance - - (713) (23 208) Add: Additions/Purchases - Cash Add: Additions - Non-cash (Less): Disposals (Less): Issues Add/(Less): Adjustments CLOSING BALANCE Include discussion where deemed relevant Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

200 DEPARTMENT OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS VOTE 7 ANNEXURES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2017 ANNEXURE 9 IMMOVABLE ASSETS ADDITIONAL DISCLOSURE The department paid the Department of Infrastructure development an amount of R31.6 Million for the procurement of the Disaster Management Centre Building, the building was recognised as the departmental asset and subsequently transferred to the Department of Infrastructure Development as the custodians of provincial buildings. 200 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017

201 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/

202 202 Gauteng Provincial Government I Co-operative Governance and Traditional Affairs I Annual Report I 2016/2017