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“The Accounting Officer Uninet Local Municipality P.0. Box 8 Burverlon 1300 30 November 2078, Reference: 02054REG15-16 Dear Sie Report of the Auditor-General on the financial statements and other legal and regulatory Fequirements of Umjindl Local Municipality for the year ended 30 June 2016. 4. The above-montionce! report ofthe Autor-General is submited haraulth in terms of section 211) ofthe Pubic Auell Act of South Arca read in conjunctian with section 188 of ie Constitution of the Republic of Soutn Aiea section 121(3} of the Municipal Finance Management Act of Soulh Aftica (MPLA), 2. We have nol ye received the other information that wil be included inthe annus report ita the aucited financial siatements ard have thus nol baen able to establish whether theze ara ny inconsistencias botwosn this Information and the audited financial statomenis ard the Tepottad pertarmane againal pre-determined oajeetvas. You are requested to suopy tis information a8 soon as possible. Once tis inforation is received it wil be read ang should any inconsistoncies li identi these will be communicated to you and you will a ‘requested to make the necessary corrections. Should tho corracions not he mede we wil amend and reissue the audit roper. 3, Intoms of section 121(3) of the MEMA you are required to include the audit ropor In tha Umjind! Loca! Muricinaly’s annual report to be tabled, 4. Uni the annual report is tablod as roquirod by section 127(2) ofthe MIFIAA the suet report is nol a public document an¢ should thorafore le treated as confidential 5. Prior to printing or copying the annual report which wil clude the audit report you ara require to do the following: ‘+ Subinit the final printer's proof ofthe annual report to the relevant sanver manager ofthe Auctor-General of South Aiea for viiiatian of the auct-related reterenoes inthe audit report and for confmation that the financial elslements and atte information ara thona dacumerts thal have been read and audited. Spacial cara should be taken wih references in your repar,eince an Incorrect referents cauld have aut implicatons. Aung ould pub confdence Audltor Generel Bape Souk Mice | ©The signature Auciter-Ganaratin the handwtig ofthe auditor authorised to sign ths ‘aust repeat al the end ofthe hard copy ofthe audit repart shauld ba canned in when prearing to pint the report. This signature, as woll a tha plage and date of signing and the Auditor-General of South Afica’s logo, shauld appear atthe end ofthe raport. in the hare copy that is provided to you. Tha oficial logo wil be made avaiable to you in slacionic fore. 8. Please notify the undersigned Senior Manager well in advance ofthe date on which the annual repcrl covlaining this audit ropont wll be table. 7. Your eosparalinn ta ensure that all thesa raquiraments are met would be much appreciated, Kindly acknowledge receipt ofthis eter Yours sincorely i ust habe Sepior anager: Mpunalanges Business Unit Enqures: tana soy Teaphere: (015) 7500600 Face (0735766 0879 Auditor's report Umjindi Local Municipality 30 June 2016 Report of the auditor-general to the Mpumalanga Provincial Legislature and the council on the Umjindi Local Municipality Report on the financial statements Introduction 41, have suited the financial statements of the Uniina | acal Municipaliy set out on pages .. 10... wbich comprise the statement af fancial pasion a 90 June: 2046, the statement of fnancial performance, statement of changes in net aesets, cash flow statement and statement of comparison of budget and actual sinounis forthe year then tended, as well as Ihe noles, comprising @ summety of significant accounting policies and othor explanatory information. Accounting officer's responsibility for the financial statements 2. The accounting tficer is responsibie for the preparation and fair presentation of these financil sateen i aeordanae wilh the Soulh Arann Slundards of Generally Recognised Accounting Practice (SA Standards of GRAP) ang the requirements of the Municipal Finance Management ict ef South Arica, 2008 (Act Ne. 5B of 2003) (MFMA) and the Division of Reverus Act of South Affioa, 2015 (Act No. 1 of 2018) (DORA), ané {or such intornal contol as the accounting offiear dolarmines.'s naaossary fo enable tho preparation of financial statements that are ite trom rrateria misstatement, whether due te fraud or errr, Auditor-general’s responsibility ‘My responsibilty is to exo16s5 an opinion on these financial statements based on my ‘audi. conducted my austin accordance with the Inlomnatonel Stenéards on Auditing. Thoze standards roquire that lcompy with cthical requirements, and plan and perform :ne aucit te obtain reesonable assurance about whether the financial statements are ‘roe frown never missile 4. An audit involves perfoting procedures to obtain audit evicence about the amounts and disclosures in the financial sistements. The procedures. selecied depend on the ‘auditor's udgement, nelusing the assessment ofthe rks of material misstatement of the finaneal statements, whether duo te fraud or ear, In making thase rik assessments, the auctor consivers internal control relevant to the municipality's preparation aed far presenaan of the Bnsincal salements in ori ko design audi proceduies thal are appropiate in the ereumstances, oul nel for the purpose ef expressing sn apinian on the eltectvenees of tne municipality’ internal corteol. An auc alz0 includes evaluating the appropriateness of acccunling poicies used and the Teascnabloness of accountng ostinates mado by management, as well 3s evaluating the overall presentation ofthe financial statements, | believe thal the aucil evidence | have objainad fe sufficient andl 9 ‘a bis for my auc opinion, ronriale to provide per rrigceain rest cheers rir? pt ae rer aren aren: aaa vyempeme ere ened Gh er inde Sali gene Fem eres i eer et leer eee nt eT re se Pe re Opinion 6. Inmmy opinion, the financial staternante present fly, inal material respects, tne financial gosifon of the Umjindi Local Municinaliy 28 at 30 June 2016 ane ite financial iparformance and cach flows lor lite year ended, in accordance with the Si Standards of GRAP and the requirements of the WAFRIA and DOR, Emphasis of matters 7. Loren attention o the maiters bolow. My opinion isnot meld in respect of these rer. Restatement of comesponding figu 8, As disclosed in nate 42 to the finaneisl statements, the coxresponding figures 430 June 2015 hve ten restated ag a Fesull of an err discavered curing the year fenced 30 June 2016 in the financial stalements of the municizally at, and forthe yeRr fenced, 30 June 20°, Material loss 8, As gisclosod in note 49 Lo the linanctal statements, material losses of 39 075 270 units (2014-18: 29 974 490 units) were Incurred as a esult of electesly disiriaulion losses, ‘nhich represented 34% (2014-15: 82%) of ths lela a Material impaiments 10, As dselosad in note 7:0 the financtal statements, the receivables balance was signiflcantly impaired. The impsimien! af consumer deblors emouniedl to R/€ 474 $69 (2014-15; 61 326 678), which represented 83% (2014-15: S86) af the total consumer oblors, This sonication tothe provision for eebt Impaitmont wae R20 380 848 (2014-15: RT 115 622), Evenis aller reporting dete 114, As discloses in note 44 to the final slalemonts, he Mbombets Loca: Municpaity ane the Unig Locsl Municipality were disestablished and « new aalogory B Trunicioallly, named City of Mborhe's, wes asteblished, as determined by the Demareation Board in acoorcancs: wih Mpumalanga Provincial Gazette No. 2667.