DC31 Nkangala Draft Budget 2015-16

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Nkangala District Municipality 2015/16 DRAFT Annual Budget and MTREF

Table of Contents
Part 1 Annual Budget Page
No.

1.1 Mayor’s Report………………………………………………………………………………………………………. 1
1.2 Council Resolutions……………………………………………………………………………………………….. 3
1.3 Executive Summary……………………………………………………………………………………………….. 6
1.4 Operating Revenue Framework……………………………………………………………………………… 8
1.5 Operating Expenditure Framework………………………………………………………………………… 10
1.6 Capital expenditure………………………………………………………………………………………………… 15
1.7 Annual Budget Tables…………………………………………………………………………………………….. 16

Part 2 SUPPORTING DOCUMENTATION 31

2.1 Overview of the Annual Budget Process…………………………………………………………………. 31
2.2 Overview of Alignment of Annual Budget with IDP…………………………………………………. 39
2.3 Measurable Performance Objectives and Indicators………………………………………………. 44
2.4 Overview of Budget Related- Policies……………………………………………………………………… 50
2.5 Overview of Budget Assumptions…………………………………………………………………………… 52
2.6 Overview of Budget Funding…………………………………………………………………………………… 56
2.7 Expenditure on Grants & Reconciliations of Unspent Funds…………………………………… 67
2.8 Councillor and Employee Benefits………………………………………………………………………….. 69
2.9 Monthly Targets for Revenue, Expenditure and Cash flow …………………………………….. 72

LISTS OF TABLES

Table 1 Consolidated Overview of the 2015/16 MTREF………………………………………………………. 7
Table 2 Summary of Revenue classified by main revenue source……………………………………….. 8
Table 3 Percentage growth in revenue by main revenue source………………………………………… 9
Table 4 Operating Transfers and Grant Receipts………………………………………………………………… 9
Table 5 Summary of operating expenditure by standard classification item……………………….. 11
Table 6 Breakdown of the main expenditure categories per local Municipality…………………… 12
Table 7 Operational repair and maintenance……………………………………………………………………… 15
Table 8 2015/16 Medium- term capital budget per asset class…………………………………………… 15
Table 9 MBRR Table A1- Budget Summary………………………………………………………………………….. 17
Table 10 Table A2- Budgeted Financial Performance (revenue & expenditure by standard 17
classification)…………………………………………………………………………………………………………..
Table 11 MBRR Table A3-Budgeted Financial Performance (revenue & expenditure by 21
municipal vote)……………………………………………………………………………………………………….
Table 12 MBRR Table A4- Budgeted Financial Performance (revenue and expenditure)………. 23
Table 13 Contributions to Local Municipalities per municipality…………………………………………… 25
Table 14 Indicative- Contributions to Local Municipalities per municipality………………………….. 26
Table 15 MBRR Table A5- Budgeted Capital Expenditure by vote, standard classification and 27
funding source………………………………………………………………………………………………………..
Table 16 MBRR Table A6- Budgeted Financial Position…………………………………………………………. 30

Table 17 MBRR Table A7- Budgeted Cash Flow Statement……………………………………………………. 32
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Nkangala District Municipality 2015/16 DRAFT Annual Budget and MTREF
Table 19 MBRR Table A8- Cash Backed Reserves/Accumulated Surplus Reconciliation…………. 33
Table 20 MBRR Table 9 – Asset Management……………………………………………………………………….. 35
Table 21 MBRR Table SA4- Reconciliation between the IDP strategic objectives and 42
budgeted revenue ………………………………………………………………………………………………….
Table 22 MBRR Table SA5 - Reconciliation between the IDP strategic objectives and 43
budgeted expenditure…………………………………………………………………………………………….
Table 23 MBRR Table SA5- Reconciliation between the IDP strategic objectives and 44
budgeted expenditure ……………………………………………………………………………………………
Table 24 MBRR Table SA7- Measurable performance objectives (replaced with QUARTERLY 47
PROJECTIONS OF SERVICE DELIVERY TARGETS AND PERFORMANCE INDICATORS AS
PER APPROVED SDBIP)…………………………………………………………………………………………….
Table 25 MBRR Table SA8-Performance indicators and benchmarks……………………………………. 48
Table 26 Credit rating outlook………………………………………………………………………………………………. 54
Table 27 Breakdown of the operating revenue over the medium – term……………………………… 56
Table 28 MBRR SA15- Detail Investment information…………………………………………………………… 58
Table 29 MBRR SA16 – Investment particulars by maturity…………………………………………………… 58
Table 30 MBRR Table SA17- Detail of borrowings…………………………………………………………………. 59
Table 31 MBRR Table SA18- Capital transfer and grant receipts……………………………………………. 60
Table 32 MBRR Table A7- Budget cash flow statements……………………………………………………….. 61
Table 33 MBRR Table A8 – Cash backed reserves/accumulated surplus reconciliation…………. 62
Table 34 MBRR SA10- Funding compliance measurement……………………………………………………. 64
Table 35 MBRR SA19 – Expenditure on transfer and grant programmes………………………………. 67
Table 36 MBRR SA20 – Reconciliation between of transfer,grant receipts and unspent funds 68
Table 37 MBRR SA22 – Summary of councillor and staff benefits…………………………………………. 69
Table 38 MBRR SA23 – Salaries, allowances and benefits (political office 70
bearers/councillors/senior managers)…………………………………………………………………….
Table 39 MBRR SA24 – Summary of personnel numbers………………………………………………………. 71
Table 40 MBRR SA25 –Budgeted monthly revenue by source and expenditure by type……….. 72
Table 41 MBRR SA26 - Budgeted monthly revenue and expenditure (municipal vote)…………. 73
Table 42 MBRR SA27 - Budgeted monthly revenue and expenditure ( standard classification) 74
Table 43 MBRR SA28 - Budgeted monthly capital expenditure (municipal vote)………………… 75
Table 44 MBRR SA29 - Budgeted monthly capital expenditure (standard classification)………. 76
Table 45 MBRR SA30 - Budgeted monthly cash flow…………………………………………………………….. 77
Table 46 MBRR SA34a – Capital expenditure on new assets by class…………………………………….. 78
Table 47 MBRR SA34c- Repairs & Maintenance by asset class………………………………………………. 79
Table 48 MBRR SA35 – Future financial implications of the capital budget…………………………… 81
Table 49 MBRR SA1 – Supporting detail to budgeted financial performance………………………… 82
Table 50 MBRR SA2 – Matrix Financial Performance Budget (revenue source/expenditure 83
type and dept.)……………………………………………………………………………………………………….
Table MBRR SA3 – Supporting detail to Budgeted Financial Position………………………………. 84

Abbreviations and Acronyms
AMR Automated Meter Reading MEC Member of the Executive Committee
ASGISA Accelerated and Shared Growth MFMA Municipal Financial Management Act
Initiative Programme
BPC Budget Planning Committee MIG Municipal Infrastructure Grant
CBD Central Business District MM Municipal Manager
CFO Chief Financial Officer MMC Member of Mayoral Committee
CPI Consumer Price Index MPRA Municipal Properties Rates Act
CRRF Capital Replacement Reserve Fund MSA Municipal Systems Act
DBSA Development Bank of South Africa MTEF Medium-term Expenditure
DoRA Division of Revenue Act Framework
DWA Department of Water Affairs MTREF Medium-term Revenue and
EE Employment Equity Expenditure Framework
EEDSM Energy Efficiency Demand Side NERSA National Electricity Regulator South
Management Africa
EM Executive Mayor NDM Nkangala District Municipality
FBS Free basic services NGO Non-Governmental organisations
GAMAP Generally Accepted Municipal NKPIs National Key Performance Indicators
Accounting Practice OHS Occupational Health and Safety
GDP Gross domestic product OP Operational Plan
GDS Gauteng Growth and Development PBO Public Benefit Organisations
Strategy PHC Provincial Health Care
GFS Government Financial Statistics PMS Performance Management System
GRAP General Recognised Accounting PPE Property Plant and Equipment
Practice PPP Public Private Partnership
HR Human Resources PTIS Public Transport Infrastructure
HSRC Human Science Research Council System
IDP Integrated Development Strategy RG Restructuring Grant
IT Information Technology RSC Regional Services Council
kℓ kilolitre SALGA South African Local Government
km kilometre Association
KPA Key Performance Area SAPS South African Police Service
KPI Key Performance Indicator SDBIP Service Delivery Budget
kWh kilowatt Implementation Plan
ℓ litre SMME Small Micro and Medium Enterprises
LED Local Economic Development
Part 1 – Annual Budget
1.1 Mayor’s Report
FOREWORD TO BUDGET BY THE HONOURABLE EXECUTIVE MAYOR, CLR TD
NGWENYA
It gives me immense pleasure to once again report to our stakeholders that the partnership
between Nkangala District Municipality and our local municipalities has once again proved
successful in assisting the district to plan it’s responses to the developmental aspirations of the
people for this financial year.
We have steadfastly continued with the trend of consulting on the IDP because we believe that,
as the sphere of government that is closest to the people, we carry a pronounced obligation to
respond directly and positively to needs of our communities.
We have to frequently reposition our development and service delivery programmes and
objectives to ensure that they address the revised needs of our stakeholders and communities
and shifting socio-economic dynamics.
Our IDP as well as the budget is thus a direct result of yet another extensive consultation process.
They are an expression of the general and specific interests of our people, and a mirror that
reflects the Nkangala electorate, as expressed during our consultation and public participation
processes.
Armed with the Key Performance beacons contained in our IDP document, Nkangala District
Municipality is once more embarking on a development path that is meant to address the needs
of our people, to create better lives for all and transform Nkangala District into the kind of home
that they aspire for.
Although much still needs to be done to deal with the increasingly obstinate triple challenges of
poverty, inequality and unemployment and to create an environment that is conducive for growth,
I am confident that this budget will provide us with the necessary vehicle to carry out the mandate
we have received from our people.
This budget gives expression to the strategic thrusts of the District, namely:
• Deepen democracy and promote good governance through the implementation of the
Back to Basics principles;
• Address job creation and accelerate economic development;
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• Unlocking the potential emerging contractors, SMME and co-operatives, including women,
the youth and people living with disabilities;
• Consolidate HIV and AIDS initiatives through the implementation of comprehensive
strategy in partnership with sector departments, business and all stakeholders;
• Ensure financial sustainability and the attainment and maintenance of a clean audit;
• Promote strategic planning and management through the annual revision of the Budget
and the IDP and to ensure the district’s participation in Inter-governmental Forums.
The district places a high premium on public participation as it rolls out several of its service
delivery projects.
The District does not limit public participation to the legislated meetings between the public
and the institution to discuss the Annual IDP Budget but also extend the process to other
menial tasks, awareness meetings and special meetings with various communities and other
role players, including traditional leaders.
The district will continue to work hard in glove with government department and private entities
to provide desired services to the communities of Nkangala and to deal with the struggle
against the triple challenges of inequality, poverty and unemployment.
The IDP and Budget of the district both serve as broad strategic documents and guides for
implementation of council priorities. Out IDP and Budget will go a long way in improving the
quality of life for our communities in our local municipalities by broadening accessibility and
alleviating poverty.
The District remains committed to the continued provision of excellent services within its
jurisdiction and we remain committed to ensuring better lives for all the people of the District.
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1.2 Council Resolutions
On 25 March 2015 the Council of Nkangala District Municipality met in the Council Chambers of
Nkangala District Municipality to consider the tabling of the draft annual budget of the municipality
for the financial year 2015/16. The following resolutions are tabled with the draft budget:
1. The Council of Nkangala District Municipality, acting in terms of section 24 of the Municipal
Finance Management Act, (Act 56 of 2003) approved:
1.1. The annual budget of the municipality for the financial year 2015/16 and the multi-year
and single-year capital appropriations as set out in the following tables:
1.1.1. Budgeted Financial Performance (revenue and expenditure by standard
classification) as contained in Table 10 on page 13;
1.1.2. Budgeted Financial Performance (revenue and expenditure by municipal vote) as
contained in Table 11 on page 15;
1.1.3. Budgeted Financial Performance (revenue by source and expenditure by type) as
contained in Table 12 on page 17; and
1.1.4. Multi-year and single-year capital appropriations by municipal vote and standard
classification and associated funding by source as contained in Table 15 on page
22.
1.2. The financial position, cash flow budget, cash-backed reserve/accumulated surplus,
asset management and basic service delivery targets are approved as set out in the
following tables:
1.2.1. Budgeted Financial Position as contained in Table 16 on page 24;
1.2.2. Budgeted Cash Flows as contained in Table 17 on page 26;
1.2.3. Cash backed reserves and accumulated surplus reconciliation as contained in
Table 18 on page 27;
1.2.4. Asset management as contained in Table 20 on page 29; and
1.2.5. Basic service delivery measurement as contained in Table 23 on page 38.
1.3. The project priority list as submitted by local municipalities in table 6 page 9 was
confirmed.
1.4. The organogram attached on pages 84 to 96 with new positions aimed at strengthening
the organisations’ performance to ensure that the priorities set out in the IDP and matters
raised by the Auditor General, be noted
1.5. The Budget timetable for 2015/2016 attached as figure 9 page 97 was approved.
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