Umgungundlovu District Municipality 16/17 Annual

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

Corp 31 ive and Level of 227 No. of 12 12 12

auxiliary compliance with meetings
support Council Calendar conducted for

Portfolio
Committees

and EXCO

Corp 32 To Gazetting of 228 Date of Not Not
improve rules and order gazetting of Included Included
the rules and
standard orders
of
administrat
ive and
auxiliary
support

Corp Good Governance and Public Participation Inauguration of 229 Date of Not Not
New Councillors Inauguration Included Included

33 of councillors

Corp 34 Councillor 230 No. of reviews 4 11 1
remuneration conducted
reviewed

Corp 35 To ensure UMDM 231 Date of Not Not
Corp 36 complianc maintenance development Included Included
e with plan developed and approval
hygiene Not Not
standards Building 232 Date of Included Included
and OHS maintenance of commencing
and
improve
building
maintenan

107 | P a g e

Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
improve
g 2016/17 2016/17 Budget Expenditure Not Performance Corporate
(Target) (Actual) Salaries as at 30 Achieved) Service
12 June 2017 (Admin and
12 Achieved None Agendas and Sound
Salaries required minutes governance
unit )

30 Nov Not Salaries Salaries Not Council has Council Corporate
2016 achieved Achieved been resolution Service
requested to (Admin and
Achieved change the Sound
notice for governance
delivery of unit
agendas,
once that is Corporate
finalised rules Service
and orders (Admin and
will be Sound
gazetted governance
unit
26 Aug 25 Aug R35 000 R300000 None Programme Corporate
2016 2016 required and circular Service
(Admin and
1 review 1 R 200 000 Salaries Achieved None Council Sound
required resolution governance
unit
31 Mar Not Budget with R0 Not Appointed None Corporate
2017 Achieved finance Achieved maintenance Service
services officer is Requisitions (Admin and
Achieved currently prepared for Sound
30 June 30 Sept Salaries Salaries drafting the governance
2017 2016 document for unit
approval
Corporate
None Service
required

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

ce and 176 and 242 building
accessibilit buildings restorations
y within
the UMDM Disaster
management
Corp 37 centre 233 Date of Not Not
Renovations completion Included Included

Corp 38 To ensure Improve fleet 234 Number of Not Not 12 12
Corp 39 complianc management fleet Included Included
e with with the management
policy and Municipality reports 12 12
improve submitted
Fleet Vehicle tracker
Managem system 235 No. of
ent monitored sessions
conducted

Com 50 To protect Incidents 236 No. of Fire 60 0 104 104
Com 51 and save handled Fighters

Com 52 life and effectively undergone
property specialized

from fire training
and other

Cross Cutting Interventions threatenin
g hazards Fire related
and to 237 Date of Not Not
Included Included
render refresher attending
courses attended refresher
humanitari by fire-fighters as
an aid well Basic course

training
Firefighting

course attended
by the newly

appointed staff

Purchase PPE 238 Date of 30 June 30 June
for the newly purchasing
PPE for the

108 | P a g e

Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
improve
g 2016/17 2016/17 Budget Expenditure Not Performance
(Target) (Actual) as at 30 Achieved)
June 2017
30 June Not R 500 000 Not Completion of building (Admin and
2017 Achieved Salaries Achieved this project is maintenance Sound
Salaries Achieved targeted for governance
4 4 R1 000 000 Salaries the new Service unit
Salaries Achieved financial year provider Corporate
12 12 Salaries Salaries Appointment Service
Partially None letter (Admin and
60 38 Budget Achieved required Sound
Adjusted Minutes of the governance
R 240 800 Achieved None fleet advisory unit
required committee Corporate
30 June 30 June Service
2017 2017 Continuous Monthly tracker (Admin and
engagements reports Sound
with COGTA governance
to de Attendance unit
conducted to register for Corporate
train Fire training Service
fighter attended and (Admin and
None certificates Sound
required governance
Attendance unit
register Community
Services
(Fire Services
unit)

Community
Services
(Fire Services
unit)

30 June 30 Sept R1 000 000 R 631 Achieved None Purchase Community
2017 2016 (Budget 859.82 required Orders Services

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

appointed Fire newly
Fighters appointed FF

Com 53 To protect Fire related 239 No. of 60 71 60 60
Com 54 and save incidents caused presentations 36 182 36 36
life and by made at
Com property Communities schools Not Not
55 from fire reduced Included Included
and other 240 Building Fire
threatenin Emergency inspections
g hazards equipment conducted
and to readily available
render all the time 241 Date of
humanitari procurement
an aid of new
equipment

Com 56 Maintaining 242 Number of Not Not 12 12
Com 57 agreement with Monthly Included Included
Msunduzi MOU payments
relating to call made
centre

Enhancing 243 Number of Not Not
skills/capacity quarterly Included Included
building and stakeholders
Cross Cutting ensuring meeting held
Interventions compliance with
SAESI

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Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
Not improve
g 2016/17 2016/17 Budget Expenditure Achieved) Performance
(Target) (Actual) as at 30
June 2017

combined (Fire Services

with Com 55) unit)

60 64 Combined Salaries Achieved, None Inspection Community
with Com 50 Target required reports Services
Inspection (Fire Services
exceeded reports unit)
Community
36 339 Salaries Achieved, None Purchase Services
Target required Orders (Fire Services
unit)
exceeded
Community
30 June 30 Sept R1 000 000 Ref Com 52 Achieved None Services
2017 2016 (Budget required (Fire Services
combined unit)
with Com 52)

12 12 R300 000 R 305 Achieved None Payment Community
515.44 required certification Services

(Fire Services
unit)

4 1 R100 000 Salaries Partially Due to budget Attendance Community
Achieved constraints register and Services

target could Agenda (Fire Services
not be met. unit)

Proper
planning in

future will be
done to

ensure target
is met.

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

Com 58 244 Annual Not Not
attendance at Included Included
SAESI
conference

Com 59 To reduce Cluster lighting 245 No of cluster 36 16 Emergency S
Com 60 the rods installed in lightning rods 36 18
Com 61 probability areas prone to installed 4
of disaster lightning Not 77
occurrence 246 No. of public 7 Included 77
s; to take At risk awareness
effective Communities campaigns
action capacitated held in LMs
during
disasters; Disaster 247 No. of DMISA Not
to provide Officials Conferences Included
immediate capacitated and Meetings
response attended
and
recovery

110 | P a g e

Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
improve
g 2016/17 2016/17 Budget Expenditure Not Performance Community
(Target) (Actual) as at 30 Achieved) Services
June 2017 (Fire Services
30 June Not Not No None unit)
2017 Achieved R0 Achieved conference
took place in
the 2016-
2017 financial
year

Services - Disaster Management R87500 Achieved, None Purchase Community
18 24 R1 550 000 Target required orders Services
(Disaster
exceeded Services unit)

74 R23000 Partially This will Awareness Community
77 Salaries Achieved prioritised in campaign Services
the new programme (Disaster
Achieved financial year Services unit)
Invitation ,
None notice of Community
required meetings and Services
conferences, (Disaster
Agenda, and Services unit)
purchase
orders

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

Comprehensive 248 % of logged 100% 100% 100% 80%
Information calls resolved
Management within 72hrs
and
Communication
System in place

Com 62

249 % of people Not Not
affected by Included Included
disaster
Cross Cutting Interventions events
provided with
emergency
relief

Com 63

111 | P a g e

Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
improve
g 2016/17 2016/17 Budget Expenditure Not Performance
(Target) (Actual) as at 30 Achieved)
June 2017
80% Not Not From the None Community
Achieved R0 Achieved shortlisting Services
process, two Incident report, (Disaster
100% 100% Achieved companies Purchase Services unit)
were orders
shortlisted, Community
the Services
evaluation (Disaster
report was Services unit)
written with a
proposal of
the two
companies
doing
presentation.
The report
was then to
be forwarded
to the
adjudication
committee.
The unit did
not receive
any feedback
from the
committee

None
required

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

Com 64 To create Appointment of 250 Date of 30 June Not
Com 65 a the Board Achieved
conducive appointment 1
Com 66 environme Sitting of the of the board
Com 67 nt for: LED Forum with 31 March
- Rural LM’s 251 No. of reports 2 4 0
developme submitted to Not
nt; and Global Insight Included
- Local Programme Mayors forum
economic registered
developme Establishment of 252 Date of 31 March
nt the functional registration
Local Economic Development Co-operative
forum 253 Date of Not

establishment Included

Com 68 Sitting of the Co- 254 No of co- Not Not
operative Forum operative Included Included

Meetings held

Com 69 Establishment of 255 Number of Not Not
Farmer FPSU Included Included
established
Production
Support Unit
(FPSU) as part
of Agri-Park

Com 70 Establishment of 256 Date of Not Not
Com 71 the informal Included
Com 72 Local Economic Development economy forum establishment Included
at district level Not
257 No of Not Included 3 3
Sitting of the meetings held Included 10
informal
economy forum

Capacitation of 258 No. of active Not Not 14
SMME Co- SMME’s Included Included
operatives and supported
emerging

112 | P a g e

Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
improve
g 2016/17 2016/17 Budget Expenditure Not Performance
(Target) (Actual) R2 500 000 as at 30 Achieved)
June 2017
30 June 29 July Achieved None Board Community
2017 2016 R1 442 Partially required appointment Services
557.42 Achieved letters (LED unit)
Achieved Going
4 1 R20 000 Achieved forward Minutes of the Community
Achieved meetings will meeting Services
Partially sit as (LED unit)
Achieved scheduled
31 March 31 March R70 000 None Purchase order Community
2017 2017 Achieved required for renewal Services
(LED unit)
30 Sep 31 March R20 000 None Minutes of the
2016 2017 required forum and co- Community
orp. support Services
programme (LED unit)

33 None Minutes of the Community
required meetings and Services
2 1 R300 000 Attendance (LED unit)
Establishmen registers Community
30 Sept 14 Sept R20 000 t is in Draft Business Services
2016 2016 progress but plan for FPSU (LED unit)
moving
slowly. Minutes of the Community
Report to be meeting Services
submitted to (LED unit)
Exco and
council for
approval
None
required

3 1 Salaries Partially Waiting for Minutes of the Community
12 52 R1 270 000 Achieved Local meeting Services
Municipalities (LED unit)
Achieved, to organise Purchase
Target on their part. orders and list Community
of SMME’s Services
exceeded None supported (LED unit)
required

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

Com 73 farmers and 259 No of Co- Not Not 40 40
Com 74 support Included
programme operatives Included
trained Not
Creation of Included
database of the 260 Establishment Not
construction date Included
companies level
1 to 4

Com 75 Registration of 261 No. of co- 8 10 20 20
Co-operatives operatives

registered

Com 76 To collect Collect database 262 Number of Not Not 4 4
Com 77 data on on jobs Register of job Included Included
Com 78 job created Created created per T
by the quarter 40
district
Municipalit 2
y in terms

of DGDP

To develop SMME 263 Numbers Not Not 40
an development SMME’s Included Included 2
economica trained Not
lly viable Provide Material Included
and tourist support for
friendly SMME’s
District
that
increases
tourism
and job
opportuniti
es

Local 264 No of SMME’s Not
Econo supported Included

mic
Develo
pment

113 | P a g e

Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
improve
g 2016/17 2016/17 Budget Expenditure Not Performance Community
(Target) (Actual) as at 30 Achieved) Services
48 June 2017 (LED unit)
Community
40 Achieved, None Attendance Services
Target required register (LED unit)
30 Sept 31 March Salaries
2016 2017 exceeded None Database
required attached
Achieved

20 26 R100 000 Achieved, None List of Co- Community
Target required operatives Services
registered (LED unit)
exceeded

4 4 Salaries Achieved None Report Community
required attached Services
(LED unit)

Tourism Development Adjusted R 1 587 Partially Trainings are Attendance Community
40 6 Budget: 705.41 Achieved conducted as register, Services
( and when invoices and (Tourism
R2 100 000 Expenditure required by purchase unit)
Budget + R for Mandela SMME’s orders
9 800 000 for marathon not
Mandela included)
Marathon

23 Achieved, None Purchase Community
Target required orders and Services
Invoices (Tourism
exceeded unit)

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

Com 79 To promote 265 Date of 31 Aug 31 Aug
tourism within Mandela Day 2015 2015
the district Marathon

Com 80 Tourism 266 Date of Rand Not Not
Included
Com 81 promotion by Easter Show Included
Com 82 (participation in 31 Dec
Com 83
Com 84 the Rand Easter Not
show) Included

Promote tourism 267 Date of 31 Dec 1
within the district Hosting
Not
Midmar Music Included
Festival

District tourism 268 Date of event Not

promoted in the Included
Royal

agricultural show

Development of 269 Number of 1 20 000 20 000

a marketing brochures
Brochure Produced and

distributed

Organise and 270 Date Hosting Not

provide support of the craft Included
at the Craft fair Fair

at uMngeni

Com 85 Development / 271 No of trainings Not Not 3 3
and and Included Included
enhancement of conferences
skills attended

Com 86 To promote 272 Date of 3 2
Com 87 tourism within attending Not Not
the district Trade and Included Included
Consumer
Development of Show
the Liberation facilitated by
Route strategy TKZN

273 Date of
development

114 | P a g e

Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
improve
g 2016/17 2016/17 Budget Expenditure Not Performance
(Target) (Actual) as at 30 Achieved)
June 2017
29 Aug
30 Aug 2016 Achieved None Close out Community
2016 required report Services
Achieved (Tourism
30 June 30 June None Invoices, unit)
2017 2017 Achieved required Purchase
orders and Community
Achieved None photos Services
required (Tourism
Achieved, unit)
Target None
31 Dec 31 Dec required Close out Community
2016 2016 exceeded report, Invoices Services
Achieved None (Tourism
30 June 04 June required Purchase unit)
2017 2017 Partially orders Community
Achieved None Services
20 000 27 000 required Purchase (Tourism
Achieved orders, unit)
31 Dec 27 April In future this invoices and Community
2016 2017 will be booklet Services
planned in Attendance (Tourism
31 line with register, unit)
tourism invoices and Community
calendar Purchase Services
None orders (Tourism
required Purchase unit)
orders and
invoices Community
Services
(Tourism
unit)

Bi-annual 05-09 Invoices and Community
31 Dec Aug 2016 Purchase Services
2016 and and 23 orders (Tourism

30 June April unit)
2017) 2017

31 March Not Not Budget None Community
2017 Achieved Achieved constraints, Services
This indicator (Tourism
will be unit)

IDP/ KPA Strategies Output (As Per No. Indicators Comparison with
SDBIP / IDP) Previous Year

No. Objective 2015/16 2015/2016
(As Per (Target) (Actual)
Deman Backlog
IDP) d

115 | P a g e

Current Year Status Measures Portfolio of Responsible
(Achieved/ taken to Evidence Department
improve
g 2016/17 2016/17 Budget Expenditure Not Performance
(Target) (Actual) as at 30 Achieved)
June 2017

removed from
the SDBIP

Assessment of Service Providers

Below is a list of all the tenders that were awarded for the 2016-2017 financial year. The monitoring of the
service providers performance is ensured through the general terms of the contract of the tender awarded.

Each user department reports to SCM on the performance of the service provider, and those service
providers who fail to perform necessary action are taken against them, this can include the cancellation
and or termination of the tender.

Assessment Key

Good – The Service Provider has been provided at acceptable standards and within the timeframes.

Poor – The Service Provider has provided below acceptable standards

TENDER AWARD SUCCESSFUL ASSESSMENT
No. NO. DATE BIDDER STATUS

DESCRIPTION AMOUNT Good Poor

SUPPLY OF JETTING 21/07/2016 TOWER CITY 41 R 2,504,906.49
1 01/2016 TRUCK

SUPPLY AND SETUP OF
SCAFFOLDING FOR 
MANDELA DAY
2 25/2016 MARATHON 15/08/2016 REINVENT IT R 185,000.00 

SUPPLY START AND 

FINISHING STRUCTURE ZERNNIES 
FOR MANDELA DAY 
3 26/2016 MARATHON 26/08/2016 TRADING LTD R 419,233.65

SUPPLY TENTS AND 

FURNITURE FOR MAVUKANI 
MANDELA DAY TRADING 
4 28/2016 MARATHON 15/08/2016 ENTERPRISES R 600,000.00

MLO
INVESTMENT/NE

UPGRADE NKANYEZINI W
COMMUNITY WATER BOSS/ZAMISANA
5 11/2016 SUPPLY 7-Sep-16 NI JV R 96,916,329.77

SERVICING OF

FIRE
6 16/2016 OCEAN FIRE SERVICES 7-Sep-16 EXTINGUISHERS R 89,490.00

PROVISION OF
MARKETING AND
COMMUNICATION YELLOWDOT

7 12/2016 SERVICES 17-Jan-17 MEDIA AND RISK R 6,882,000.00

EVENTS COORDINATOR Mbusowethu
8 04/2017 FOR BUDGET IZIMBIZO 24-Apr-17 Trading R 245,000.00

EVENTS COORDINATOR Xolisisizwe Trading R 366,880.50
9 04/2017 FOR BUDGET IZIMBIZO 24-Apr-17 and Projects

PANEL OF LEGAL PER GAZETTED
10 23/2016 ADVISORS 26-Apr-17 TKN Incorporated RATES

PANEL OF LEGAL 26-Apr-17 Taleni Godi Inc PER GAZETTED
11 23/2016 ADVISORS RATES

116 | P a g e

TENDER AWARD SUCCESSFUL ASSESSMENT
No. NO. DATE BIDDER STATUS
26-Apr-17
DESCRIPTION 26-Apr-17 Siyaya Attorneys AMOUNT Good Poor
26-Apr-17 Poswa PER GAZETTED
PANEL OF LEGAL 26-Apr-17 Incorporated RATES 
12 23/2016 ADVISORS Mdledle PER GAZETTED
26-Apr-17 Incorporated RATES
PANEL OF LEGAL 26-Apr-17 Hajra Patel PER GAZETTED 
13 23/2016 ADVISORS 26-Apr-17 Incoporated RATES
Pravina Govender PER GAZETTED
PANEL OF LEGAL 26-Apr-17 Attorneys and RATES 
14 23/2016 ADVISORS Conveyances
26-Apr-17 Siva Narsimaloo PER GAZETTED
PANEL OF LEGAL 26-Apr-17 Chetty RATES 
15 23/2016 ADVISORS 26-Apr-17 Matthew Francis PER GAZETTED
26-Apr-17 Inc RATES
PANEL OF LEGAL Buthelezi Mtshali PER GAZETTED 
16 23/2016 ADVISORS 28-Mar-17 Mzulwini Attorneys RATES 
Inc 
PANEL OF LEGAL 28-Jun-17 Potgiter Kunene PER GAZETTED
17 23/2016 ADVISORS 28-Jun-17 Xaba (PKX) RATES
28-Jun-17 Attorneys
PANEL OF LEGAL Mhlanga PER GAZETTED
18 23/2016 ADVISORS Incorporated RATES
PER GAZETTED
PANEL OF LEGAL Venn Attorneys RATES 
19 23/2016 ADVISORS Xaba Attorneys PER GAZETTED
Incorporated RATES
PANEL OF LEGAL PER GAZETTED 
20 23/2016 ADVISORS RATES 

PANEL OF LEGAL 
21 23/2016 ADVISORS
TOWER CITY R 751,471.93 
PANEL OF LEGAL TRADING
22 23/2016 ADVISORS MMOLANA- R 19,116,346.37
ANDEL-MOKOENA R 467,205.00
PANEL OF LEGAL PROJECTS CC R 2,003,531.76
23 23/2016 ADVISORS
SERENITY
VARIATION ORDER - SERVICES CC
SUPPLY OF ONE
24 01/2016 JETTING TRUCK NASHUA
MARITZBURG
MAQONGQO WATER 
25 01/2017 SUPPLY PHASE 5 

SHORT TERM
26 06/2017 INSURANCE

27 07/2017 PHOTOCOPY SERVICES

117 | P a g e

CHAPTER 4 – ORGANISATIONAL DEVELOPMENT PERFORMANCE

COMPONENT A: INTRODUCTION TO THE MUNICIPAL PERSONNEL

EMPLOYEE TOTALS, TURNOVER AND VACANCIES

The Municipality currently employs 429 officials, who individually and collectively contribute to the
achievement of municipality’s objectives. The primary objective of the Human Resource Management unit
is to render an innovative HR service that addresses both skills development and an administrative
function.

The below table indicates the total number of officials employed in the Municipality;

TOTAL NUMBER OF EMPLOYEES
2016/2017

Department Approved Filled Posts Number of Number of
Office of the Municipal Posts 26 Management vacancies
Manager Levels
60 34
10

Budget and Treasury unit 82 65 3 17

Community Services unit 210 148 10 62

Corporate Services unit 71 43 3 27

Technical Services unit 408 110 11 298

Total 831 392 37 438

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VACANCY RATE

VACANCY RATE 2015/2016

Designation Total approved Filled Vacant
posts as per
Municipal Manager Organogram 1 0
CFO 1 1 0
Other Section 57 Managers (Excluding Finance posts) 1 3 0
Other Section 57 Managers (Finance Posts) 0 0
Fire Fighters 3 103 5
Senior Management Levels (Excluding Finance Posts) 0 29 13
Senior Management Levels (Finance Posts) 108 5 0
Highly Skilled Supervision Levels ( Excluding Finance 42 29 5
posts) 5
Highly Skilled Supervision Levels (Finance Posts) 6 0
Total 34 177 23

6
200

TURNOVER RATE TURNOVER RATE

Financial Year Total appointments Terminations during Turnover Rate
2015/2016 the Year
2016/2017 30 58 -
34 26 76%

COMMENTS ON VACANCIES AND TURNOVER RATE

As at the end of June 2017, all senior management positions were filled. The municipality’s turnover rate
was 76% at the end of the financial year, critical posts are filled as and when people resign, depending on
the availability of budget.

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COMPONENT B: MANAGING THE MUNICIPAL WORKFORCE

POLICIES

The Municipality has developed and adopted policies through which personnel administration is conducted.
The policies in place are grounded in sound research, critical analysis and solid proposals to clearly
express its ideas of supplying sound services to the community.

Below is a list of all policies that govern the municipality, this includes date of their adoption by Municipal
structures;

Name of Policy Department Last adopted Status of policy
Occ. Health & Safety Corporate Services 29.05.2015 Approved
Annual Leave Corporate Services 29.05.2015 Approved
Sick Leave Corporate Services 29.05.2015 Approved
Family Responsibility Leave Corporate Services 29.05.2015 Approved
Maternity &Paternity Corporate Services 29.05.2015 Approved
Special Leave Corporate Services 29.05.2015 Approved
Induction Policy Corporate Services 29.05.2015 Approved
Staff Appointment Corporate Services 29.05.2015 Approved
Probationary Period Corporate Services 29.05.2015 Approved
Promotion and demotion Corporate Services 29.05.2015 Approved
Bursary Policy Corporate Services 29.05.2015 Approved
Learnership Policy Corporate Services 29.05.2015 Approved
Long Service Policy Corporate Services 29.05.2015 Approved
Succession &Career Pathing Corporate Services 29.05.2015 Approved
HIV/AIDS Policy Corporate Services 29.05.2015 Approved
Acting in Higher Position Corporate Services 29.05.2015 Approved
Recruitment &Selection Corporate Services 29.05.2015 Approved

120 | P a g e

Name of Policy Department Last adopted Status of policy
Placement Policy Corporate Services 29.05.2015 Approved
Sexual Harassment Corporate Services 29.05.2015 Approved
Employment Equity Corporate Services 29.05.2015 Approved
Ethics Policy Corporate Services 29.05.2015 Approved
Fraud &Corruption Corporate Services 29.05.2015 Approved
Confidential Policy Corporate Services 29.05.2015 Approved
Use of Municipal Assets Corporate Services 29.05.2015 Approved
Termination of Employment Corporate Services 29.05.2015 Approved
Education ,Training & Skills
Development Corporate Services 29.05.2015 Approved
Security and Access Control Corporate Services 29.05.2015 Approved
Municipal Sponsored Corporate Services 29.05.2015 Approved
Substance Abuse Corporate Services 29.05.2015 Approved
Generic Human Res. Practice Corporate Services 29.05.2015 Approved
Telecommunication Corporate Services & 29.05.2015 Approved
Organisational Performance ICT
Management Office of the Municipal 26.05.2017 Approved
Manager

INJURIES AND SUSPENSIONS

An occupational injury is a personal injury, disease or death resulting from an occupational accident.
Compensation claims for such occupational injuries are calculated according to the seriousness of the
injury /disease and has cost implications to the municipality. Occupational injury will influence the loss of
man hours and therefore financial and productivity performance.

121 | P a g e

The table below indicates the total number of injuries within the municipality for the period of 2016/2017
financial year.

Number of injuries for 2016/2017

Type of injury Injury leave taken No. of employees using
injury Leave
Required basic medical attention 28 4
only
Temporary total disablement 0 0
Permanent disablement 0 0
Fatal 0 0
Total 28 4

COMMENT ON INJURY ON DUTY INCIDENTS

Injury on duty statistics has dropped to the lowest rate compared to previous years. Awareness, trainings
and protective clothing supply and the correct use of PPC are the main contributors of the low rate IOD’s
incidents. The Municipality has developed and communicated to all employees the IOD process flow, the
appointment of Health and Safety representatives are the major steps used to curtail IOD stats.

SUSPENSIONS FOR THE PERIOD 2016/2017

Number and Periods of Suspensions

Position Nature of alleged Date of Details of disciplinary Date finalised
Fire Fighter misconduct suspension action taken/ or Case 26 October 2016
status and reasons
 Abuse of 30 May 2016 why it is not finalised

council vehicle Finalised – Plea
bargain at Disciplinary
 Loss of Hearing and signed
municipal Cell acknowledgement of
Debt (AOD)
phone

 Damage to
council vehicle

 Insubordination

122 | P a g e

DISCIPLINARY ACTIONS TAKEN ON CASES OF FINANCIAL MISCONDUCT
Disciplinary Action taken on cases of Financial Misconduct

Position Nature of Alleged Rand Value Disciplinary action taken Date finalised
Misconduct and
Revenue Clerk R 292 500 Disciplinary hearings 22 August
Rand Value R190 000 instituted. Employee 2017
Administration Theft of cash resigned at the disciplinary
Officer: Fire hearing 23 March 2017
services Unit Fraud and
Corruption Disciplinary hearings
instituted. Employee
resigned at the disciplinary
hearing

COMMENTS ON SUSPENSIONS AND CASES OF FINACIAL MISCONDUCT

All cases of misconduct in the 2016/2017 financial year were concluded. In combatting fraud and
corruption the municipality has a fraud and corruption hotline, a fraud and prevention strategy and has
conducted anti -theft workshops in all municipal departments.

PERFORMANCE REWARDS

Individual performance management appraisals of section 54/56 managers are regulated by Regulations
27(4) of the Municipal Performance Regulations for the Municipal Managers and Managers directly
accountable to the Municipal Manager of 2006. These regulations were passed in terms of the Municipal
Systems Act 2000. The uMgungundlovu District Municipality has cascaded Individual Performance
Management system to the levels of senior managers only. The performance of each senior within the
district is linked to the municipal strategic objectives as highlighted on the IDP, performance agreement/or
performance plans and departmental SDBIP.

In May 2017, the performance appraisal panel met to assess the performance all senior managers in the
municipality for the 2015/2016 financial year. The assessments took into account the employees
performance agreements/plans, departmental SDBIP and overall performance of the municipality including
the AG’s report for the period.

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The results of the appraisal panel were as follows;

PERFORMANCE REWARD BY GENDER

Designation Gender Evaluation Recommended
results (%) payment, (%) of
annual inclusive
Municipal Manager Male 131%
Male 136% package
Executive Manager: Female 131% 5.21%
Technical Services Male 130%
6.27%
Executive Manager: Financial
Services 5.21%

Executive Manager: 5.00%
Community Services

COMMENTS ON PERFORMANCE REWARDS

The above table illustrates the results of the performance evaluation for each senior manager within the
district for the 2015/2016 financial year. For the current year (2016/2017) the performance appraisals will
be conducted after receiving the AG’s report for the 2016/2017 financial year and upon finalisation of the
annual report process i.e. March 2018.

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COMPONENT C: CAPACITATING THE MUNICIPAL WORKFORCE

SKILLS DEVELOPMENT AND TRAINING

The municipality has an obligation in terms of the Skills Development Act of 1998, to develop its employees
by providing training and development opportunities for them. In light of the above the municipality as a
learning organisation understands the importance of human resource development and human capital,
has developed and implemented a workplace skills plan (WSP) that is based on the capacity and

developmental requirements identified by employees and managers.

All municipal employees have been encouraged to submit their bursary application to the skills
development unit, to be forwarded to the bursary committee for further scrutiny. The committee then made

recommendations on who qualifies to receive such assistance based on the motivations received.

Below is a list of all trainings and skills programme employees supported on;

2015/2016

Gender

Position Female Male Programme Name Type of programme
Municipal Councillors 12 12 Skills programme
COGTA – Accredited
Environmental Health 5 5 Councillors training Learner ship
Officers
LGSETA:
Environmental Practise

Emergency Services 8 23 LGSETA: Disaster Risk Learner ship
Officers Management

Call centre Agents 10 11 Contact centre support Learner ship

Plumbers 2 10 Water and wastewater Learner ship
treatment process
operations

General workers 0 4 First Aid training Short course
2016/2017

Clerical Support officers 19 5 Public Participation Skills programme
training

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MFMA Implementation Report as at 30 June 2017: Municipal Regulations on Minimum Competency Levels

Description A. Total B. Total Consolidated: Consolidated Consolidated: Consolidated:
number of number of Total of A and Competency Total number Total number
officials officials B assessments of officials of officials
employed employed completed for whose that meet
by by A and B performance prescribed
municipality municipal (Regulation agreements competency
(Regulation entities 14(4) (b) and comply with levels
14(4)(a) and (Regulation (d)) the (Regulation
(c )) 14(4)(a) and Regulation 16 14 (4) (e ))
(c )) (Regulation

14(4)(f))

Financial 1 1 2010
Officials 1 nil 1010
Accounting Officer 3 nil
3 nil 3212
Chief Financial 3303
Officer 1 nil
Senior Managers 1101
9 1 10 6 3 6
Any other financial
officials

Supply Chain
Management
Officials
Supply chain
Management
managers

TOTAL

COMMENTS ON SKILLS DEVELOPMENT AND FINANCIAL COMPETENCY REGULATIONS

Training and development is implemented through the WSP which outlines the planned training and
development for an organisation. Its main purpose is to make provision for training and development that
meets the needs of the municipality to able to fulfil its developmental role as well as training and
development that grows and develops employees in order to enable them to work effectively and efficiently
in the delivery of services to the communities . The municipality remains fully compliant with the minimum
competency regulations requirements.

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CHAPTER 5 – FINANCIAL PERFORMANCE

This chapter seeks to provide highlights of the financial performance of the district over the financial year
and greater detail is carried in the audited annual financial statements that follow from this review.

Below is the summary of the financial performance over the period 2016/2017.

SUMMARY PERFORMANCE STATEMENT

2017 2016 2015 Year on Year
% change

Actual Actual Actual

Revenue

Service charges 124 228 853 125 457 447 116 303 319 -1%

Investment revenue 15 432 321 17 019 400 12 260 127 -9%

Grant transfers and subsidies 608 077 666 716 833 795 605 143 266 -15%

Other income 34 554 306 22 380 312 21 425 856 54%
Total Revenue 782 293 146 881 690 954 755 132 568 -11%

Expenses 198 158 827 181 327 612 176 151 821 9%
Employee costs 10 239 416 10 937 383 10 835 832 -6%
Remuneration of councillors 61 521 906 55 713 431 83 590 797 10%
Depreciation & amortisation 19 737 550 10 252 994 2 433 301 93%
Finance charges 76 625 687 15%
Bulk purchases 121 186 282 105 044 656 -9%
Contracted Services 142 306 896 156 871 341 131 936 580 14%
Other expenditure 175 522 040 154 290 320 155 711 119 8%
Total Expenditure 728 672 917 674 437 737 637 285 137

Revenue

The district has again steered a challenging year with cost increases and pressured water business which
saw the district exploring new means of providing water to its citizens with the drought taking its grip on the
countries water resources. Service charges remained low due to reduced sales from the drought
conservative consumption and the preservation measures to improve the protection of the water resources.
The slight decrease in the water sales is also owned to a low increase in water tariff that was effected in the
2016/2017 financial year which contributes to the sales not inclining as has been the trend over the years.

Key revenue drivers remained grant income and service charges. The contribution from service charges has
been inclining over the past 3 years reducing the grant dependency of the district only slightly to below 80%.
The municipality has committed to charging tariffs that are cost reflective which are to be phased in over time
and has begun this route in the 2017/2018 budget year. This is to ensure that the water business is able to
meets its cost demands. The approach of phasing in is also to ensure that the costs are eased into
household’s expenses much more steadily.

The growth in other income has been mainly due to the funds received from the Adaptation fund for the
implementation of the climate change programme which the district will champion in collaboration with SANBI
over 5 years from 2016. Whilst grants remained a driver of income there has been a reduction due to a
lesser amount being bridge financed for the capital investment programme in the 2016/2017 year. The district

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was advanced a facility of R200 million over 3 years with the final R50 million being utilised in the 2016/2017
year with the highest spend of R80 million in the 2015/2016 financial year. The front loading approach to
project implementation has assisted the municipality is fast tracking service delivery through innovative
methods. The success of the bridge finance programme has resulted in advanced growth in the capital asset
which means service delivery has been fast tracked for the benefit of the communities.
Overall the decline in revenue for the period ended June 2017 was 11% and the factors indicated above
being the factors influencing the change. Material variance on both the operating revenue and expenditure
is detailed in note 42 of the audited annual financial statements.

Expenditure
The municipality continued to strive to manage costs in a rather challenging economic climate and kept
overall cost increases to 8% despite an average increase in water direct costs increasing by an average
15%. Major expenditure drivers in the current year have remained employee costs, contracted services and
bulk purchases. The detail of other expenditure breakdown is detailed in the annual financial statements.
Employee costs increased were kept within the negotiated rates with the bargaining council at 8%. A mixture
of factors contributed to this increase mainly being nominal recruitments vs attrition posts not filled and the
annual bargaining council increases. The increases in salaries are expected to be much higher in the
2017/2018 financial year due to the introduction of job evaluation results which were first implemented in
June 2017. The district has been cautiously monitoring the employee costs factor to operating expenses to
ensure a healthy balance between staff costs and costs to cater for service delivery operating imperatives.
The employee costs collectively with the councillor’s remuneration contributed 28% to overall operating
expenses which was well within the norm set by national treasury of 25%-40%.

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Bulk purchases which are in the main the core of the business of the district increased by 15% which is
directly linked to the tariff increase received from Umgeni Water of 11% for a significant portion of 2016/2017
financial year.
The National Treasury requires that municipalities maintain contracted services within 5% of operating
expenditure however cognizance must be made to the different factors that influence the decision to maintain
certain levels of contracted services which amongst others are efficiencies and economies of scale. With the
scarcity of resources and growing demand for water provision the municipality has still had to rely heavily on
the use of water tankers as a means of its most basic level of provision for water to those communities who
have no access to running water. Contracted services reduced by 9% from prior year reducing the
contribution to total expenses from 23% to 20%. This was also influenced by a number of contracts that
came to an end within the financial year. Greater detail on the factors influencing contracted services can be
found in note 26 of the audited annual financial statements.

Summarily the cost and revenue trend line reflects faster growing revenue and slower growth in operating
expenditure. Between 2013 and 2017 revenue has grown 26% and expenditure has grown by only 21%. If
the averages over the 5 years are compared the indication is that there has been a resultant slower growth
in revenue (5%) vs the expenses (14%) compared to 2017 figures. This must be normalized in the long run
to ensure normal growth in both costs and income.

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Capital Expenditure

In the 2016/2017 financial year the district managed an asset base of over R1, 2 billion worth of which 96%
remains water and sanitation infrastructure. The district invested just under R300 million in infrastructures in
the 2016/2017 financial year. Of the investment made over the years the district has had to transfer assets
to ethekwini municipality and umzinyathi due to the re-demarcation process that took effect in August 2016.

This investment included a major investment made in the AC pipe replacement in the Hilton and Merrivale
areas which collectively is worth R230 million over a 2 year period which will see these communities
experience a more reliable supply of water and a reduction in water losses from aged infrastructure.

The projects are set for completion in the 2017/2018 financial year with benefits in reduced water losses
from the 2 towns.

The capital investment made in 2017 was largely financed from grants and borrowings. See capital grants
utilized in the financial year in note 28 and 11 of the annual financial statements for further details.

The district is still grappling with the high replacement cost of aged infrastructure whilst it faces new demand
from communities who have yet to access sustainable water and sanitation supply. The district has invested
heavily in the replacement of aged infrastructure and equally on new infrastructure networks but however
still faces challenges in fully meeting its demand with the scarcity of resources.

Despite the challenges the district commitment to improving service provision in the water & sanitation
business is demonstrated by its continued shift towards higher spending on capital assets.

Below is a demonstration of how the district has progressed from capital expenditure to total expenditure of
17% in 2014 to 23% in 2017.

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Over the years the district has grown its asset base by 64% from 2013 to 2017. Whilst the district has
achieved above norm, investment in capital infrastructure in spite of the resource limitation more can still be
done to improve on repairs and maintenance contributions to secure a longer life span for its water and
sanitation business infrastructure. It must also be noted that a significant portion of planned maintenance
costs are reported as contracted services as the services of mechanical and electrical engineering are
contracted out by council. See note 7& 26 for more detail.

Consumer debtors
Total consumer debt has risen by 23% from R402 million from R327 million in the 2016 financial year. The
district has had a challenging year in its efforts to collect against the outstanding accounts. This has
worsened with the decline of household disposable income due to inflation. The district services a largely
rural community with very little purchase power which further strains the service provision by the district. The
district has also geared its efforts in addressing indigent households to ensure that the debt book is managed
more prudently. A debt relief scheme was successfully introduced to ease and encourage repayments for
indebted households. Whilst the debt book has grown it has certainly grown at a slights slower pace than in
prior year. See note 4 for further details.

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Liquidity Management
The district held cash and cash equivalents worth R94million of which R3, 75million was held as security for
the DBSA loans. The district has maintained cash coverage ratios above the treasury norm for the past 4
years. The current ratio has inclined over the years due to the increase in consumer debtors and other
receivables from exchange transactions which are mainly from the prepaid expenditure from MIG and WSIG
which are capital grants. Whilst the financial resources remain under pressure the liquidity of the council
remains healthy.

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Borrowings
The district held loans with the DBSA of R219 million which have been drawn down from the 2014/2015
financial year with the final draw down made in the current financial year. Over the years the district has
fully redeemed loans taken out by the Indlovu regional council and has only 1 loan remaining with a
redemption date of September 2018. The significant portion of the R219 million is part of a R230 million
loan taken out to meet the demand of failed infrastructure in the Hilton and Merrivale areas wherein the
asbestos pipes have now been replaced with modern technology pipe which has proven to be more
durable than asbestos. At this stage the district has almost exhausted its appetite for debt with the debt to
revenue ratio at 36% compared to the maximum allowed of 45%. The debt to revenue ratio is projected to
improve in the 2017/2018 financial year with the revision of tariffs which have boosted operating revenue
sources in line with the council’s route to ensuring a cost reflective tariff for the services. The capital cost
ratio has also exceeded the norm of 6%-8% which indicated that any debt acquired at this stage should be
done under strict conditions and strong financial planning to ensure a balance on the capital cost ratio.
Below is an illustration of capital cost ratio and debt to revenue ratio over the years.

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Over the past 9 years the district has obtained unqualified audit opinions with 3 clean audits in the later
years. It is through the concerted hard work and dedication of the staff and councillors that we are able to
achieve such good results. We acknowledge that the district still has room to grow in achieving the quest of
a district that is centered on providing excellence to its citizens.

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CHAPTER 6- AUDITOR GENERAL’S AUDIT FINDINGS
COMPONENT A: 2016/2017 AUDITOR GENERAL’S REPORT

Report of the auditor-general to the KwaZulu-Natal Provincial Legislature and the council on
uMgungundlovu District Municipality
Report on the audit of the financial statements

Opinion
1. I have audited the financial statements of the uMgungundlovu District Municipality set out on pages

177 to 231 which comprise the statement of financial position as at 30 June 2017, and the statement of
financial performance, statement of changes in net assets, cash flow statement and the statement of
comparison of budget information with actual information for the year then ended, as well as the notes
to the financial statements, including a summary of significant accounting policies.
2. In my opinion, the financial statements present fairly, in all material respects, the financial position of
the uMgungundlovu District Municipality as at 30 June 2017, and its financial performance and cash
flows for the year then ended in accordance with SA Standards of GRAP and the requirements of the
MFMA and DoRA.
Basis for opinion
3. I conducted my audit in accordance with the International Standards on Auditing (ISAs). 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.
4. I am independent of the uMgungundlovu District Municipality in accordance with the International
Ethics Standards 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 and the IESBA code.
5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my
opinion.
Emphasis of matters
6. I draw attention to the matters below. My opinion is not modified in respect of these matters.
Material impairment – Trade debtors
7. As disclosed in note 4 to the financial statements, material losses to the amount of R37, 27 million
(2015-16: R2, 062 million) were incurred as a result of a write-off of irrecoverable trade debtors.

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Material losses - Water
8. As disclosed in note 32 to the financial statements, the municipality incurred material water losses of

R38, 22 million (2015-16: R36, 66 million) which represents 38% (2015-16: 39%) of total water
purchased. This loss is attributed to water distribution losses, ageing infrastructure, faulty meters and
illegal connections.

Other matter
9. I draw attention to the matter below. My opinion is not modified in respect of this matter.

Unaudited disclosure notes

10. In terms of section 125(2), (e) of the MFMA the municipality is required to disclose particulars of non-
compliance with the MFMA in the financial statements. This disclosure requirement did not form part of
the audit of the financial statements and accordingly I do not express an opinion thereon.

Responsibilities of the accounting officer for the financial statements

11. The accounting officer is responsible for the preparation and fair presentation of the financial
statements in accordance with South African Standards of Generally Recognised Accounting Practice
(SA Standards of GRAP) and the requirements of the Local Government: Municipal Finance
Management Act of South Africa, 2003 (Act No. 56 of 2003) (MFMA) and the Division of Revenue Act
of South Africa, 2015 (Act No. 1 of 2015) (DoRA) and for such internal control as the accounting officer
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

12. In preparing the financial statements, the accounting officer is responsible for assessing the
municipality’s ability to continue as a going concern, disclosing, as applicable, matters relating to going
concern and using the going concern basis of accounting unless the accounting officer either intends
to liquidate the municipality or to cease operations, or has no realistic alternative but to do so.

Auditor-general’s responsibilities for the audit of the financial statements
13. 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 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 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.

14. A further description of my responsibilities for the audit of the financial statements is included in the
annexure to the auditor’s report.

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Report on the audit of the annual performance report

Introduction and scope
15. 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 findings on the reported
performance information against predetermined objectives for the selected development priority
presented in the annual performance report. I performed procedures to identify findings but not to
gather evidence to express assurance.

16. My procedures address the reported performance information, which must be based on the approved
performance planning documents of the municipality. I have not evaluated the completeness and
appropriateness of the performance indicators included in the planning documents. My procedures
also did not extend to any disclosures or assertions relating to planned performance strategies and
information in respect of future periods that may be included as part of the reported performance
information. Accordingly, my findings do not extend to these matters.

17. I evaluated the usefulness and reliability of the reported performance information in accordance with
the criteria developed from the performance management and reporting framework, as defined in the
general notice for the development objective - basic service delivery on pages x-x presented in the
annual performance report of the municipality for the year ended 30 June 2017.

18. I performed procedures to determine whether the reported performance information was properly
presented and whether performance was consistent with the approved performance planning
documents. I performed further procedures to determine whether the indicators and related targets
were measurable and relevant, and assessed the reliability of the reported performance information to
determine whether it was valid, accurate and complete.

19. I did not raise any material findings on the usefulness and reliability of the performance information for
the selected development priority.

Other matters
20. I draw attention to the matters below.

Achievement of planned targets

21. The annual performance report on pages 61 to 114 includes information on the achievement of
planned targets for the year and explanations provided for the under and overachievement of a
number of targets.

Adjustment of material misstatements

22. We identified material misstatements in the annual performance report submitted for auditing. These
material misstatements were on the reported performance information of basic service delivery
development priority. As management subsequently corrected the misstatements, we did not raise any
material findings on the usefulness and reliability of the reported performance information.

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Report on audit of compliance with legislation

Introduction and scope

23. In accordance with the PAA and the general notice issued in terms thereof I have a responsibility to
report material findings on the compliance of the municipality with specific matters in key legislation. I
performed procedures to identify findings but not to gather evidence to express assurance.

24. The material findings on compliance with specific matters in key legislations are as follows:

Annual financial statements

25. The financial statements submitted for auditing were not prepared in all material respects in
accordance with the requirements of section 122 of the MFMA. Material misstatements of non-current
assets, liabilities and disclosure items identified by the auditors in the submitted financial statement
were subsequently corrected, resulting in the financial statements receiving an unqualified audit
opinion.

Expenditure management

26. Money owed by the municipality was not always paid within 30 days, as required by section 65(2)(e) of
the MFMA.

Consequence management

27. Fruitless and wasteful expenditure incurred by the municipality was not investigated to determine if any
person is liable for the expenditure, as required by section 32(2)(b) of the MFMA.

Other information
28. The accounting officer is responsible for the other information. The other information comprises the

information included in the annual report which includes the mayor’s foreword, the accounting officer’s
report and the audit committee’s report. The other information does not include the financial
statements, the auditor’s report and the selected development priority presented in the annual
performance report that have been specifically reported in the auditor’s report.

29. 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.

30. 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
development priority presented in the annual performance report, or my knowledge obtained in the
audit, or otherwise appears to be materially misstated.

31. I did not receive the other information prior to the date of this auditor’s report. When I do receive and
read this information, if I conclude that there is a material misstatement therein, I am required to
communicate the matter to those charged with governance and request that the other information be
corrected. If the other information is not corrected, I may have to retract this auditor’s report and re-
issue an amended report as appropriate; however, if it is corrected this will not be necessary.

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Internal control deficiencies

32. 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.

33. The matters reported below are limited to the significant internal control deficiencies that resulted
finding on compliance with legislation included in this report.

Financial and performance management
34. Management did not prepare regular, accurate and complete financial and performance reports that

were supported by reliable information as evidenced by the material misstatements identified in the
annual financial statements and the annual performance report. This was mainly due to staff not fully
understanding the requirements of the financial reporting framework and the performance information
requirements.
Other reports
35. I draw attention to the following engagement conducted by the South African Police Services that had,
or could have an impact on the matters reported in the municipality’s financial statements, reported
performance information, compliance with applicable legislation and other related matters. This report
did not form part of my opinion on the financial statements or my findings on compliance with
legislation.
36. The South African Police Services investigated allegations of possible misappropriation of the
municipality’s assets at the request of the municipality, which covered the period 2015-16 to 2016-17. All
cases but one has been closed due to insufficient evidence. As at the date of this report, the investigation
was still pending.

Pietermaritzburg
30 November 2017

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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 development objectives and on the municipality’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 municipality’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 uMgungundlovu District Municipality’s 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 municipality to cease
continuing 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.
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.

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MANAGEMENT ACTION PLAN ON AG FINDINGS 2016/2017

No. of

No Finding times Description Corrective measure Due Responsible
reported Date person

in 3

years

Provisions 1 Leave accrual for six day Reconcile leave days 30-Jun- HOD:
workers calculated to cap leave at 48 days 18 Corporate
1 Overstatement of Services
provision due to incorrectly at a maximum as opposed to 57 days
incorrect capping of of 57 days as opposed for six day workers.
annual leave and to 48 days as per Leave balances to be
leave balances not collective agreement. reconciled to correct
credible Leave balances are also the system error.
incorrect and require
reconciliation.

Employee costs 1 Overpayments due to Acknowledge of debt to 30-Jan- Office of the
2 Councillors debt upper limits be signed by relevant 18 Speaker
implementation not councillors and
owing recovered from deductions to resume. impleme CFO
councillors A clarity meeting to nted
3 Differences in 1 explain the need for impleme HR Manager
councillors 1 misallocation of the AOD to be set with nted and
remuneration 1 expenditure into the affected 30-May- Expenditure
employee costs councillors. 18 Manager
4 Long service Misallocation was HR Manager
allowance Incorrect long service corrected.
allowance paid Reconciliation of
5 Payslip testing salaries to be
Incomplete information performed
in personnel files calculation to be
reviewed before
implementation

review of
completeness of files
to be performed

Property plant and equipment

6 Evidence for 1 No evidence of the Indicators template to 30-Mar- HOD
revaluation and impairment indicator be developed and 18 Technical
assessment approved by council.
assessment for Services

indication of

impairment

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No Finding No. of Description Corrective measure Due Responsible
times Date person
AFS preparation reported Errors in cash flow
7 Cash flow statement, in 3 statement, budget Errors corrected and 30-Jun- CFO
years statement, PPE WIP case ware training to 18
budget statement, disclosure, employee be planned.
Changes in net assets 1 benefits presentation Independent review of
and PPE disclosure and accounting policy the AFS to be
and presentation presentation. Non conducted
errors reversal of prior year
accruals

Receivables 1 Risk profiling of debtor New risk profile impleme CFO
outdated resulting in an developed nted
8 Outdated risk profiling understatement of debt
of debtors impacting impairment
on receivables Suspense accounts not
cleared
9 Suspense account not 1 suspense accounts impleme Manager
cleared Customers with unpaid already cleared and nted Revenue
accounts not account no longer on
10 Failure for 1 disconnected the MSCOA chart 30-Apr- CFO
discontinuation of consistently. 18
services Non qualifying indigents Panel of contractors for WSA
customers listed as disconnections and 30-May- Manager
11 Invalid indigent status 1 indigent customers restrictors to be 18
of customers implemented. OMM
3 quotations not immedia
12 Noncompliance with 1 obtained for Mandela Database to be tely
SCM policy Marathon contractor. submitted to AG for
CAATS assessment
before approval of
indigents.

All procurement to be
done through SCM

Revenue 1 Incorrect tariff charged to Human error which has immedia Manager
a category of customers. been corrected. Tariff tely Revenue
13 Noncompliance with calculations to be
tariff policy system error duplicated reviewed before immedia Manager
interest charge implementation. tely Revenue
14 interest on late 1
payments Error corrected and
understatement credit note passed on
affected accounts.
Reasonableness

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No. of

No Finding times Description Corrective measure Due Responsible
reported Date person

in 3

years

testing to interest to be

conducted monthly

15 output tax not levied 1 Output tax not charged output tax to be immedia Manager
on water connection on connection fees
fees charged on connection tely Revenue

fees

SCM 1 3 quotations not All procurement to be immedia OMM
obtained for Mandela done through SCM tely
16 Noncompliance with Marathon contractor.
SCM policy UIFW Expenditure to 30-Mar- Manager
prior year fruitless and be investigated by 18 SCM
17 Investigations into 1 wasteful expenditure not MPAC
fruitless and wasteful investigated

expenditure incurred

in prior years

Expenditure 1 Bank reconciliation not Bank reconciliations to immedia Manager
1 performed timeously be done monthly tely Expenditure
18 Reconciliation of bank
not done timeously Payments to suppliers monthly reporting of impleme Manager
not done within 30 days invoices to be done nted Expenditure
19 Payments not done from receipt of invoice monthly with reasons
within 30 days for failure

IT 2 User activity reports and Pastel to be engaged IT Manager
failed login attempts on to enable the audit logs
20 User activity audit pastel application was settings. IT server IT Manager
logs on pastel not not periodically reviewed capacity plan should IT Manager
reviewed to ensure unauthorised be developed to
activities and suspicious
logon attempts were ensure that a process
identified and is in place to avoid
investigated. servers running out of
space and the
ICT usage and security municipality having to
policy not reviewed delete important logs
and reports that are
stored off these
servers.

21 ICT usage and 1 Business Continuity Plan organisational
security policy not 2
reviewed
not approved business continuity
22 Business Continuity plans to be developed
Plan not approved

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No Finding No. of Description Corrective measure Due Responsible
times Date person
23 Program changes reported by each Manager for
made on Pastel not in 3 key processes IT Manager
reviewed years affecting business IT Manager
continuity IT Manager
24 Pastel administrator 2 Program changes made Pastel to be engaged
activities not on Pastel not reviewed to enable the audit logs
reviewed. settings in order to
2 Pastel Application track versions
25 Vacant posts within administrator activities Pastel to be engaged
the ICT function were not periodically to enable the audit logs
reviewed. settings.

1 Posts within ICT not
filled

Predetermined objectives Reported targets not Ensure that SDBIP is 31-Jan- PMS
26 Inaccuracy of reported realistic reviewed before 18 Manager

targets approval by the Mayor,
2017/2018 SDBIP to
be reviewed to ensure
errors are not
repeated.

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COMPONENT B: 2015/2016 AUDITOR GENERALS REPORT

Report of the Auditor-General to the KwaZulu-Natal Provincial Legislature and the Council on
uMgungundlovu District Municipality

Report on the financial statements

Introduction

1. I audited the financial statements of the uMgungundlovu District Municipality set out on pages … to …,
which comprise the statement of financial position as at 30 June 2016, the statement of financial
performance, statement of changes in net assets, cash flow statement and statement of comparison of
budget and actual information for the year then ended, as well as the notes, comprising a summary of
significant accounting policies and other explanatory information.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation and fair presentation of the financial
statements in accordance with the South African Standards of Generally Recognised Accounting
Practice (SA Standards of GRAP) and the requirements of the Local Government: Municipal Finance
Management Act of South Africa, 2003 (Act No. 56 of 2003) (MFMA) and the Division of Revenue Act
of South Africa, 2015 (Act No. 1 of 2015) (DoRA), and for such internal control as the accounting
officer determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.

Auditor-general’s responsibility

3. My responsibility is to express an opinion on the financial statements based on my audit. I conducted
my audit in accordance with the International Standards on Auditing. Those standards require that I
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the
municipality’s preparation and fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the municipality’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.

5. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my
audit opinion.

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Opinion

6. In my opinion, the financial statements present fairly, in all material respects, the financial position of
the uMgungundlovu District Municipality as at 30 June 2016 and its financial performance and cash
flows for the year then ended, in accordance with the SA Standards of GRAP and the requirements of
the MFMA and DoRA.

Emphasis of matters

7. I draw attention to the matters below. My opinion is not modified in respect of these matters.

Material losses and impairments

8. As disclosed in note 33 to the financial statements, the municipality incurred material losses
amounting to R36,66 million (7,39 million kilolitres) (2015: R32,87 million - 8,12 million kilolitres) as a
result of water distribution losses, ageing infrastructure, faulty meters and illegal connections, which
represents 39% (2015: 46%) of the total water purchased.

9. As disclosed in note 24 to the financial statements, the municipality incurred material losses to the
amount of R50, 25 million (2015: R65, 92 million) as a result of a write-off of irrecoverable trade
debtors.

Additional matter

10. I draw attention to the matter below. My opinion is not modified in respect of this matter.

Unaudited disclosure notes

11. In terms of section 125(2) (e) of the MFMA the municipality is required to disclose particulars of non-
compliance with the MFMA. This disclosure requirement did not form part of the audit of the financial
statements and accordingly I do not express an opinion thereon.

Report on other legal and regulatory requirements

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 findings on the reported
performance information against predetermined objectives for selected objectives presented in the
annual performance report, compliance with legislation and internal control. The objective of my tests
was to identify reportable findings as described under each subheading but not to gather evidence to
express assurance on these matters. Accordingly, I do not express an opinion or conclusion on these
matters.

Predetermined objectives

13. I performed procedures to obtain evidence about the usefulness and reliability of the reported
performance information for the provision of access to sustainable quality drinking water and sanitation
services; the improvement of access to basic levels of water; the improvement of access to basic
levels of sanitation and the maintenance of the district road network objectives presented in the annual
performance report of the municipality for the year ended 30 June 2016.

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