DC15 O R Tambo AFS 2019-20 unaudited

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OR Tambo District Municipality
(Registration number : DC15)
Annual Financial Statements
for the year ended 30 June 2020
OR Tambo District Municipality
(Registration number : DC15)
Annual Financial Statements for the year ended 30 June 2020
General Information
The reports and statements set out below comprise the annual financial statements presented to the council:
Index Page
General Information 1 - 3
Members of the Council 4 - 5
Foreword 6
Statement of Financial Position 7
Statement of Financial Performance 8
Statement of Changes in Net Assets 9
Cash Flow Statement 10
Statement of Comparison of Budget and Actual Amounts 11 - 14
Accounting Policies 15 - 41
Notes to the Annual Financial Statements 42 - 76
Abbreviations
GRAP Generally Recognised Accounting Practice
SARS South African Revenue Services
VAT Value Added Tax
IAS International Accounting Standards
AFS Annual Financial Statements
ME's Municipal Entities
MEC Member of the Executive Council
MFMA Municipal Finance Management Act
MIG Municipal Infrastructure Grant (Previously CMIP)
RBIG Reginal Bulk Infrastructure Grant
WSIG Water Services Infrastructure Grant
IGRAP Interpretations of Generally Recognised Accounting Practice
OR Tambo District Municipality
(Registration number : DC15)
Annual Financial Statements for the year ended 30 June 2020
General Information
EXECUTIVE MAYOR: Cllr Sokanyile T.
SPEAKER: Cllr Nkompela X.D.
MEMBERS OF THE MAYORAL COMMITTEE
Executive Mayor Cllr Sokanyile T.
Deputy Executive Mayor Cllr Nogumla R.Z.
MMC: Water and Sanitation Services Cllr Ngqongwa N.
MMC: Budget and Treasury Office & Internal Audit Cllr Giyose R.M.
MMC: Corporate Services Cllr Mdledle N.
MMC: Community Services Cllr Mdoda N.Z.
MMC: Rural Economic Development Programme Cllr Zozo D.
MMC: Human Settlement & Disaster Management Cllr Mjokovana D.
MMC: Special Programmes & Social Services Cllr Godongwana S.
MMC: IGR, Panning, Research & Policy Development Cllr Dambuza M. B.
MMC: Technical Services Cllr Sabona J.
GRADING OF THE LOCAL AUTHORITY: Grade 5
AUDITORS:
External: Auditor-General South Africa
Internal: Own Staff
PRIMARY BANKER: First National Bank
REGISTERED OFFICE:
Magwa House Private Bag X6043
Nelson Mandela Drive MTHATHA
MTHATHA 5099
5099
Telephone: [phone]; Facsimile: [phone]
E-Mail: [email protected]
Website: www.ortambodm.gov.za
MUNICIPAL MANAGER CHIEF FINANCIAL OFFICER
O.N. Hlazo [phone] M.E. Moleko [phone]
[email protected] [email protected]
ACTING MUNICIPAL MANAGER
F. Mphako [phone]
[email protected]
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OR Tambo District Municipality
(Registration number : DC15)
Annual Financial Statements for the year ended 30 April 2020
General Information
1. APPROVAL OF FINANCIAL STATEMENTS
TheAccountingOfficerisrequiredbytheMunicipalFinanceManagementAct(Act56of2003),tomaintainadequateaccounting
records and is responsible for the content and integrity of the annual financial statements and related financial information
includedinthisreport. ItistheresponsibilityoftheAccountingOfficertoensurethattheannualfinancialstatementsfairlypresent
the state of affairs of the municipality as at the end of the financial year and the results of its operations and cash flows for the
periodthenended. Theexternalauditorsareengagedtoexpressanindependentopinionontheannualfinancialstatementsand
was given unrestricted access to all financial records and related data.
The annual financial statements were prepared in accordance with Standards of Generally Recognised Ac-counting Practice
(GRAP) as well as relevant interpretations, guidelines and directives issued by the Accounting Standards Board.
The annual financial statements are based upon appropriate accounting policies consistently applied and supported by
reasonable and prudent judgements and estimates.
I,astheAccountingOfficer,acknowledgethatIamultimatelyresponsibleforthesystemofinternalfinancialcontrolestablishedby
themunicipalityand place considerable importance onmaintaining astrong control environment. To enable me to meetthese
responsibilities,Ihavesetstandardsforinternalcontrolaimedatreducingtheriskoferrorordeficitinacost-effectivemanner. The
standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures
and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the
municipality and all employees are required to maintain the highest ethical standards in ensuring the municipality’s business is
conductedinamannerthatinallreasonablecircumstancesisabovereproach. Thefocusofriskmanagementinthemunicipality
isonidentifying,assessing,managingandmonitoringallknownformsofriskacrossthemunicipality. Whileoperatingriskcannotbe
fullyeliminated,themunicipalityendeavorstominimiseitbyensuringthatappropriateinfrastructure,controls,systemsandethical
behavior are applied and managed within predetermined procedures and constraints.
Ihavehasreviewedthemunicipality’scashflowforecastfortheyearto30June2021and,inthelightofthisreviewandthecurrent
financialposition,Iamsatisfiedthatthemunicipalityhasorhasaccesstoadequateresourcestocontinueinoperationalexistence
for the foreseeable future.
TheannualfinancialstatementsarepreparedonthebasisthatthemunicipalityisagoingconcernandthattheORTamboDistrict
Municipality has neither the intention nor the need to liquidate or curtail materially the scale of the municipality.
Although, I am primarily responsible for the financial affairs of the municipality, this is supported by the municipality's external
auditors.
I would like to bring to your attention the following material matters to your attention:
The external auditor, being the Auditor General of South Africa, is responsible for independently reviewing and reporting on the
municipality's annual financial statements. The annual financial statements have been examined by the municipality's external
auditors and their report is presented on page xx.
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OR Tambo District Municipality
(Registration number : DC15)
Annual Financial Statements for the year ended 30 June 2020
Statement of Financial Position as at 30 June 2020
Figures in Rand Note(s) 2020 2019
Restated*
CURRENT ASSETS
Inventories 2 A01 7,566,477 16,704,811
Receivables from Exchange Transactions 3 A02 125,000,672 82,319,707
Receivables from Non-exchange Transactions 4 A03 1,034,990 3,553,058
Prepayments 5 A06 132,672,949 209,801,187
VAT Receivable 6 A04 59,391,055 55,752,380
Cash and Cash Equivalents 7 A05 322,955,526 270,129,619
6 48,621,669 638,260,762
NON-CURRENT ASSETS
Property, Plant and Equipment 8 A07 6,810,703,979 6,348,345,527
Intangible Assets 9 A08 1,985,318 2,800,811
Investment Property 10 A09 2,200,000 2,200,000
Heritage Assets 11 A10 247,025 2 47,025
6,815,136,322 6,353,593,363
TOTAL ASSETS 7 ,463,757,991 6,991,854,125
CURRENT LIABILITIES
Consumer Deposits 12 A12 3,449,431 3,213,932
Employee Benefit Liabilities - Current portion 13 A13 5,030,000 3,211,000
Payables from Exchange Transactions 14 A14 419,324,662 380,024,293
Payables from Non-exchange Transactions 15 A15 12,560,102 7,349,137
Unspent Conditional Grants and Receipts 16 A16 457,734,975 338,905,803
8 98,099,170 732,704,165
NON-CURRENT LIABILITIES
Employee Benefit Liabilities 17 A13 118,938,861 113,540,052
1 18,938,861 113,540,052
TOTAL LIABILITIES 1 ,017,038,031 846,244,217
Net Assets 6,446,719,960 6,145,609,908
Accumulated surplus / (Deficit) 18 6,446,719,960 6,145,609,908
6,446,719,960 6,145,609,908
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OR Tambo District Municipality
(Registration number : DC15)
Annual Financial Statements for the year ended 30 June 2020
Statement of Financial Performance
Figures in Rand Note(s) 2020 2019
Restated*
REVENUE
Revenue from Exchange Transactions
Service Charges 19 B01 274,834,301 246,651,582
Rental of Facilities and Equipment 20 B02 36,582 97,810
Interest Earned - External Investments 21 B03 26,822,232 40,327,770
Interest Earned - Outstanding Debtors 22 B03 27,544,912 41,772,269
Operational revenue 23 B04 371,136 36,148
Income from Agency Services 24 B06 186,995 139,182
Total revenue from exchange transactions 3 29,796,158 3 29,024,761
Revenue from Non-exchange Transactions
Transfer revenue
Government Grants and Subsidies Received 25 B07 1 ,690,081,653 1 ,920,562,307
Total revenue from non-exchange transactions 1 ,690,081,653 1 ,920,562,307
Total revenue 2 ,019,877,811 2 ,249,587,068
EXPENDITURE
Employee Related Costs 26 B08 (690,766,204) (539,950,108)
Remuneration of Councillors 27 B09 (21,312,027) (22,303,123)
Depreciation and Amortisation 28 B10 (226,614,511) (212,487,007)
Impairment Losses 29 B11 (94,949,316) (4,263,256)
Bad Debts Written off 30 B12 (10,766,969) (300,650,408)
Finance Costs 31 B13 (12,611,101) (9,314,986)
Bulk Purchases 32 B14 (47,200,703) (35,044,992)
Contracted Services 33 B15 (181,272,635) (228,655,810)
Transfers and subsidies 34 B16 (176,470,473) (222,818,543)
Inventory Consumed 35 B17 (36,313,260) (29,191,771)
Operational Costs 36 B18 (212,420,346) (273,636,441)
Total expenditure (1,710,697,545) (1,878,316,445)
Operating Surplus 3 09,180,266 3 71,270,623
Reversal of Impairment 37 B05 678,654 229,052,444
Profit / (Loss) on Disposal of Property, Plant and Equipment (22,004,868) (1,050,862)
Actuarial Gain / (Loss) 13,256,000 (8,027,000)
(8,070,214) 2 19,974,581
Surplus for the year 3 01,110,051 5 91,245,204
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