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ST – B12/15
Ndanduleni Makhari (358 8100/1)
BUDGET & POLICY MONITORING COMMITTEE: SEPTEMBER 2008
FINANCIAL SERVICES DEPARTMENT:
MUNICIPAL FINANCE MANAGEMENT ACT (MFMA): MONTHLY FINANCIAL
REPORT FOR AUGUST 2008 (MONTHLY BUDGET STATEMENT)
1. PURPOSE
To comply with section 71 of the MFMA, by the provision of a statement to the
Executive Mayor containing certain financial particulars. This is an interim
report to achieve MFMA compliance.
2. STRATEGIC OBJECTIVE
“5. To ensure good governance, financial viability and optimal institutional
transformation with capacity to execute its mandate.”
(Unaltered)
3. BACKGROUND
Section 71 of the MFMA requires that:
The accounting officer of a municipality must by no later than 10 working days
after the end of each month submit to the mayor of the municipality, and the
relevant provincial treasury, a statement in the prescribed format on the state
of the municipality's budget reflecting certain particulars for that month and for
the financial year up to the end of that month.
Further explanation of the requirements is described in Annexure I.
Material variances will be briefly referred to in this report, but a comprehensive
analysis will be included within the Corporate monthly financial report.
4. AUGUST 2008 REPORT
This report is based upon financial information available at the time of
preparation. The financial results for the period ended 31 August 2008 are
summarised as follows:
1
Statement of Financial Performance (SFP) (Annexure A)
The SFP shown in Annexure A is prepared on a similar basis to the prescribed
budget format, detailing revenue by source type and expenditure by input type.
The summary report indicates the following:
Summary Statement of Financial Performance:
August YTD August YTD Variance
Description Budget Actual Fav(Unfav)
R'000 R'000 R'000
Total Revenue By Source (2,070,879) (1,505,935) (564,944)
Total Operating Expenditure 1,947,831 1,657,942 289,889
(SURPLUS)/DEFICIT (123,049) 152,008 (275,057)
The major revenue variance is explained by:
• Property rates (R363m unfavourable/ under- or non billing)
• Service charges (R274m unfavourable/ under- or non-billing)
• Government Grants and subsidies – Operating (R200m favourable/
excess receipt of grants)
• Government Grants and subsidies – Capital (R99m unfavourable/ under-
recognition of grants received)
• Other Income (R15m unfavourable/ under-collection)
The major operating expenditure variance can be explained by:
• Employee costs (R93m favourable/under-expenditure)
• Repairs and Maintenance (R32m favourable/under-expenditure)
• Bulk purchases (R267m unfavourable/over-expenditure)
• General expenses (R299m favourable/under-expenditure)
Capital expenditure report (Annexure B)
The Capital expenditure report shown in Annexure B has been prepared on the
basis of the format required to be lodged electronically with National Treasury,
and is categorised into major output ‘type’. The summary report indicates the
following:
Summary statement of Capital Expenditure
August YTD August YTD Variance
Description Budget Actual Fav(Unfav)
R'000 R'000 R'000
TOTAL Capital Expenditure 193,652 147,866 45,786
TOTAL Capital Financing (193,652) (147,866) (45,786)
The status of year-to-date capital expenditure, compared to departmental
Service Delivery Budget Implementation Plan (SDBIP) targets for the key
infrastructure items as indicated in Annexure B are:
Roads, Pavements, Bridges & Stormwater (R5m less than budget target)
Water Reservoirs & Reticulation (R8m less than budget target)
Electricity Reticulation (R3m more than budget target)
Sewerage Purification & Reticulation (R2m less than budget target)
Housing (R7m less than budget target)
2
[Note: ‘budget target’ refers to the forecast for the period ending August 2008
included in the approved SDBIP].
Annexure C is an analysis of actual capital expenditure compared to the
original budget targets, on a monthly and year-to-date basis. Annexure C
indicates that total expenditure for the month ending 31 August, 2008 was 91%
of the August monthly budget target and the total year-to-date expenditure is
5% measured against the total budget.
The charts in Annexure C include a chart of the capital expenditure and budget
trends since 2001/02.
Cash Flow Statement (CFS) (Annexure D)
The CFS report for August 2008 indicates that:
• The cash and cash equivalents closing balance as at the end of August
2008 was R380m.
• Revenue receipts of R1, 262m compared to the target of R1, 155m.
• Grants and subsidies of R504m, compared to a target of R451m, related
to the recognition of all operating and capital grants.
• Cash and creditor payments of R812m compared to a target of R447m.
Outstanding Debtors report (Annexure E)
The Debtors report has been prepared on the basis of the format required to be
lodged electronically with National Treasury. This format provides an extended
aged analysis, as well as an aged analysis by debtor type. The summary
report indicates that a total of R2, 380m is greater than 30 days outstanding, an
increase of R85m if compared R2, 295m of July 2008.
The chart illustrates that there is an ongoing collection problem with respect to
debtors in the greater than 150 day, but less than 180 day category. R1, 755
billion is outstanding in this category, with R1, 244m attributable to households
(a decrease of R11m from R1, 255m in July 2008).
Outstanding Creditors report (Annexure F)
The Creditors report has been prepared on the basis of the format required to
be lodged electronically with National Treasury. This format provides an
extended aged analysis, as well as an aged analysis by creditor type. The
summary report indicates that there are not any long term outstanding
creditors, and that the majority of the CoT’s creditors are trade creditors.
The chart compares this month’s results with the previous financial year which
indicates that all the Aged Creditors per category has increased, with the
exception of Bulk Water and Vat, which is lower at the end of August 2008
compared to the previous year.
Key performance indicators (Annexure G)
The table refers to the agreed objectives as contained within the Restructuring
Grant conditions and the actual percentages achieved.
3
Investment Portfolio (Annexure H)
The table and chart indicates the status of the investment portfolio and detail of
instruments of where invested, is R813m for the month.
5. FINANCIAL IMPLICATIONS
This interim report indicates various financial risks which require monitoring:
• Achievement of the operating revenue budget
• Achievement of the operating expenditure budget
• Achievement of the capital expenditure budget
As at the end of August 2008 the operating revenue and expenditure ‘actuals’
represented approximately 12% and 14% of the annual budget, with 16% of
the year having elapsed. This is the second month of the 2008/09 reporting
cycle and therefore the variance will significantly change favourably as the year
progresses.
‘Actual’ capital expenditure for the month of August 2008 represents 91% when
compared to the projection as per the approved SDBIP, a variance of 9%.
6. KEY AUGUST 2008 PERFORMANCE (FINANCIAL) INDICATORS
The unfavourable result regarding service charges revenue is having a
negative effect on a number of indicators which are based on total revenue,
and which is further, influenced by a corresponding under expenditure, on the
capital budget.
7. INTERDEPARTMENTAL AND CLUSTER IMPACT
This is an interim report to achieve MFMA compliance. A comprehensive
corporate monthly financial report will be provided to the Budget and Policy
Committee, the Mayoral Cluster Committee, the Finance Portfolio Committee
and the Mayoral Committee.
8. COMMENTS OF THE HEAD: LEGAL SERVICES
The abovementioned report as such does not call for legal clarification.
9. IMPLICATIONS
• Human Resources
Not applicable.
• Finances (budget and value for money)
This report is an overview of the financial results for the period ended 31
August 2008, as well as any Operating and Capital Budget variances. Upon
receipt of the statement or report submitted by the Accounting Officer to the
Executive Mayor in terms of Section 71 of the MFMA, the Executive Mayor
4
is obliged to take certain steps with regard to “budgetary control and early
identification of financial problems” as determined in Section 54 of the
MFMA. Furthermore, the Accounting Officer of the Municipality must report
in writing to the Municipal Council with regard to impending shortfalls,
overspending, and overdrafts in terms of Section 70 of the MFMA.
• Constitution and legal factors
The implication of approval of this report is compliance to legislative
requirements (Section 71 of the MFMA).
• Communication
In compliance to legislative requirements (Section 71 of the MFMA) this
document is provided to all stakeholders by placing it on the Tshwane
Public website.
10. CONCLUSION
This report meets the MFMA requirement for the Executive Mayor to receive a
section 71 ‘monthly budget statement’ at the end of the reporting month.
ANNEXURES:
A. Statement of Financial Performance
B. Capital expenditure report
C. Capital expenditure analysis and charts
D. Cash Flow Statement
E. Outstanding Debtors Report
F. Outstanding Creditors Report
G. Key performance indicators
H. Investment Portfolio
I. Explanation of legal requirements
RECOMMENDED
That, in compliance with Section 71 of the MFMA:
(1) That, the Accounting Officer submits to the Executive Mayor this statement
reflecting certain particulars for the month ending 31 August 2008; and
(2) That, in order to comply with Section 71(4) of the MFMA, the Accounting Officer
ensure that this statement be submitted to National Treasury and the Provincial
Treasury, in both a signed document format and in electronic format.
5
REPORT – FLOW COMPLIANCE CHECK
(LAST DAY FOR REPORTS TO COMMITTEE SECRETARY BY 12:00
• SECTION 79 CITY PLANNING COMMITTEE
- NO OBJECTIONS – 12 WORKING DAYS BEFORE THE MEETING
- OBJECTIONS – 20 WORKING DAYS BEFORE THE MEETING
• ALL OTHER COMMITTEES
- 9 WORKING DAYS BEFORE THE MEETING)
FILE : ST – B12/15
INITIATOR : Ndanduleni Makhari (358-8100/1) /Ria van Heerden (358-8470)
HEADING (INCLUSIVE OF NAME OF DIVISION/DEPARTMENT):
FINANCIAL SERVICES DEPARTMENT
MFMA SECTION 71 MONTHLY FINANCIAL REPORT FOR AUGUST 2008
REPORT CHECKED AND PASSED FOR SUBMISSION TO: BUDGET & POLICY MONITORING COMMITTEE: SEPTEMBER 2008
COMPREHENSIVENE
SS (FACTS,
COMMENTS, CORRECTNESS QUALITY
RECOMMENDATIONS
ANNEXURES) (√) (√)
(√)
ACTING EXECUTIVE DIRECTOR: BUDGET OFFICE
DM (RIA) VAN HEERDEN
WARD-SPECIFIC : YES NO
WARD COUNCILLOR COMMENTS: YES NO
SIGNATURE: ……………………………………….…..
DATE : …………………………………………………...
EXECUTIVE DIRECTOR: REVENUE MANAGEMENT:
AP DYAKALA
WARD-SPECIFIC : YES NO
WARD COUNCILLOR COMMENTS: YES NO
SIGNATURE: ……………………………………….…..
DATE : …………………………………………………...
HEAD OF DEPARTMENT: CHIEF FINANCIAL OFFICER –
NDANDULENI MAKHARI
REPORT ALSO BEARS APPROVAL OF :
CM
SIGNATURE: …………………………………………...
DATE : ………………………………………………..….
CITY MANAGER: KIBA KEKANA
REPORT ALSO BEARS APPROVAL FOR
SUBMISSION:
YES NO
SIGNATURE: ………………………………………..….
DATE : ..………………………………………………...
6
CITY OF TSHWANE - PARENT ENTITY STATEMENT OF FINANCIAL PERFORMANCE for the period ended 31 August 2009
Preceding Current Year 2008/09
Year 2006/07
Notes
Description
Audited Approved Current August August YTD August YTD August YTD August YTD Full Year
Actual Budget Budget Monthly Budget Actual % Budget Variance Forecast
Actual
Operating Revenue by Source R'000 R'000 R'000 R'000 R'000 R'000 % R'000 R'000
Property rates (1,719,224) (3,246,000) (3,246,000) 375 (541,000) (178,285) 6% 362,715 (3,246,000)
Service charges (4,201,485) (5,498,707) (5,498,707) (217,483) (931,398) (657,861) 12% 273,537 (5,498,707)
REVENUE, YTD BUD
Rental of facilities and equipment (70,028) (68,452) (68,452) (10,676) (11,310) (12,186) 18% (876) (68,452)
Interest earned - external investments (134,187) (120,441) (120,441) (5,070) (20,073) (5,927) 5% 14,146 (120,441)
REVENUE, YTD ACT
Interest earned - outstanding debtors (142,516) (173,624) (173,624) (21,882) (28,937) (41,946) 24% (13,009) (173,624)
Fines (38,390) (53,891) (53,891) (2,804) (8,982) (6,129) 11% 2,853 (53,891)
Licences and permits (21,817) (24,931) (24,931) (2,766) (2,164) (2,864) 12% (700) (24,931)
Government Grants and subsidies - Operating (1,248,260) (1,725,378) (1,725,378) (32,516) (270,080) (470,230) 27% (200,150) (1,725,378)
Government Grants and subsidies - Capital 1 (317,834) (961,481) (961,481) (33,884) (133,252) (33,884) 4% 99,368 (961,481)
Other income (523,677) (656,770) (656,770) (47,720) (94,026) (79,333) 12% 14,693 (656,770)
Public contributions, donated & contributed PPE (165,567) (138,000) (138,000) (10,437) (23,000) (17,291) 13% 5,709 (138,000)
Gains on disposal of PPE (21,471) (41,302) (41,302) (6,657) 0% 6,657 (41,302)
Total Revenue By Source (8,604,455) (12,708,977) (12,708,977) (384,862) (2,070,879) (1,505,935) 11.8% 564,945 (12,708,977)
Operating Expenditure
Employee related costs 3 2,412,004 3,234,656 3,234,656 222,137 539,109 445,743 14% (93,366) 3,234,656
Remuneration of Councillors 45,946 76,722 76,722 3,548 12,787 7,073 9% (5,714) 76,722
Bad debts 193,489 131,774 131,774 21,962 0% (21,962) 131,774
EXPENDITURE, YTD ACT
Collection costs 49,538 70,281 70,281 7,032 11,714 9,374 13% (2,340) 70,281
EXPENDITURE, YTD BUD
Depreciation 2 558,584 832,526 832,526 49,928 143,831 99,855 12% (43,976) 832,526
Repairs and maintenance 1,325,085 1,413,138 1,413,138 139,396 230,840 198,590 14% (32,250) 1,413,138
Interest paid 314,136 354,567 354,567 570 68,360 841 0% (67,519) 354,567
Bulk purchases 2,130,979 2,563,032 2,563,032 336,428 406,579 674,046 26% 267,467 2,563,032
Grants and subsidies paid 8,392 12,953 12,953 40 2,159 844 7% (1,315) 12,953
General expenses 2,628,171 3,319,224 3,319,224 172,622 609,036 310,090 9% (298,946) 3,319,224
Internal recoveries (1,388,106) (509,487) (509,487) (54,429) (98,547) (88,658) 17% 9,889 (509,487)
Loss on disposal of PPE 9,915 144 144 144
ANNEXURE A
Total Operating Expenditure 8,288,135 11,499,385 11,499,385 877,416 1,947,830 1,657,942 14.4% (289,889) 11,499,385
(SURPLUS)/DEFICIT (1) (316,320) (1,209,592) (1,209,592) 492,553 (123,049) 152,008 275,057 (1,209,592)
Reserve movements (1)
Transfer to(from) Government Grant Reserve 1 317,834 961,481 961,481 14,316 160,247 14,316 2% (145,931) 961,481
Depreciation off-sets 2 (397,172) (408,143) (408,143) (30,060) (68,024) (60,123) 15% 7,900 (408,143)
Transfer to CRR/Donations/Contrib Res./Other 395,657 656,254 656,254 144 10,168 144 0% (10,024) 656,254
(SURPLUS)/DEFICIT after reserves for the yr 3 0 (0) (0) 476,954 (20,658) 106,344 127,002 ()
Notes
1. Surplus includes capital government grants which are appropriated to the capital expenditure budget
2. Includes depreciation charges for externally funded assets; offset by transfer from reserve accounts
3. Current Budget amount inclusive of labour costs (secondary costs in distribution accounts)
7
Annexure B
CITY OF TSHWANE - PARENT ENTITY CAPITAL EXPENDITURE & SOURCES OF FUNDS FOR 2008/09
Preceding
Year Current Year 2008/09
2006/07
NT
Description Audited Approved August August YTD August YTD August YTD August YTD Full Year
Code
Actual Budget Monthly Prorata Actual % Budget Var. Forecast
Actual
Capital expenditure by NT category R'000 R'000 R'000 R'000 R'000 % R'000 R'000
INFRASTRUCTURE 0100
Roads, Pavements, Bridges & Storm Water 0300 233,823 579,195 30,294 35,475 30,694 5% 4,781 579,195
Water Reservoirs & Reticulation 0400 207,559 722,711 33,146 44,265 36,066 5% 8,199 722,711
Car Parks, Bus Terminals and Taxi Ranks 0500 16,072 28,772 1,132 1,762 1,416 5% 347 28,772
Electricity Reticulation 0600 318,899 350,833 21,800 21,488 24,435 7% (2,947) 350,833
Sewerage Purification & Reticulation 0700 103,338 64,550 2,401 3,954 2,401 4% 1,553 64,550
Housing 0800 195,463 225,235 4,089 13,795 6,381 3% 7,414 225,235
Street Lighting 0900 39,200 913 2,401 913 2% 1,488 39,200
Refuse sites 1000 20,215 210 1,238 575 3% 663 20,215
Gas 1100
Other 1200 73,818 470,401 28,811 0% 28,811 470,401
Sub-total Infrastructure 1300 1,148,972 2,501,112 93,985 153,188 102,880 4% 50,308 2,501,112
COMMUNITY 1400
Establishment of Parks & Gardens 1500 5,443 5,800 355 0% 355 5,800
Sportsfields 1600 69,570 189,153 11,162 11,585 21,068 11% (9,482) 189,153
Community Halls 1700 13,861 1,200 50 73 50 4% 23 1,200
Libraries 1800 2,000 122 0% 122 2,000
Recreational Facilities 1900 5,022 34,400 898 2,107 1,432 4% 675 34,400
Clinics 2000 14,345 29,500 1,807 0% 1,807 29,500
Museums & Art Galleries 2100 752 6,150 377 0% 377 6,150
Other 2200 8,928 25,700 155 1,574 155 1% 1,419 25,700
Sub-total Community 2300 117,921 293,903 12,265 18,001 22,705 8% (4,704) 293,903
HERITAGE ASSETS 2310
Heritage Assets 2311
Sub-total Heritage Assets 2312
INVESTMENT PROPERTIES 2320
Investment Properties 2321 20,000 1,225 0% 1,225 20,000
Sub-total Investment Properties 2322 20,000 1,225 0% 1,225 20,000
OTHER ASSETS 2400
Other motor vehicles 2500 4,903 28,000 45 1,715 45 0% 1,670 28,000
Plant & equipment 2600 369 17,000 958 1,041 958 6% 83 17,000
Office equipment 2700 6,000 26 367 26 341 6,000
Abattoirs 2800
Markets 2900 174 19,600 229 1,200 2,734 14% (1,534) 19,600
Airports 3000 11,157 149,250 9,229 9,141 15,385 10% (6,244) 149,250
Security Measures 3100
Civic Land and Buildings 3110 50,267 72,100 4,416 4,416 72,100
Other Land and Buildings 3120 5,661 2,082 2,184 (2,184)
Other 3200 16,419 24,300 949 1,488 949 4% 539 24,300
Sub-total Other Assets 3300 88,950 316,250 13,518 19,370 22,281 7% (2,911) 316,250
SPECIALISED VEHICLES 3400
Refuse 3500
Fire 3600 10,000 28,000 1,715 0% 1,715 28,000
Conservancy 3700
Ambulances 3800
Buses 3900 2,500 153 153 2,500
Sub-total Specialised Vehicles 4000 10,000 30,500 1,868 0% 1,868 30,500
TOTAL Capital Expenditure 4100 1,365,844 3,161,765 119,768 193,652 147,866 5% 45,786 3,161,765
SOURCES OF FINANCE 4200
External Loans 4300 (1,041,958) (2,138,968) (99,091) (131,007) (116,467) 5% (14,541) (2,138,968)
Asset Financing Reserve 4400 (6,752) (61,316) (373) (3,755) (2,905) 5% (851) (61,316)
Surplus Cash 4500
Public contributions/ donations 4600
Government Grants and Subsidies 4700 (317,134) (961,481) (20,304) (58,889) (28,494) 3% (30,394) (961,481)
Leases 4800
Other Ad-Hoc Financing Sources 4900
Other 5000
TOTAL Capital Financing 5100 (1,365,844) (3,161,765) (119,768) (193,652) (147,866) 5% (45,786) (3,161,765)
8
Annexure C
Parent Entity Capital Expenditure per month for the period ended 31 August 2009
Monthly allocation Year-to-date allocation
Mth. Original Actual for Actual as % Original Current Actual Year- Actual as
Budget month Projection Budget Budget to-date % Orig.
Budget
targets
R'000 R'000 % R'000 R'000 R'000 %
Jul 61,877 28,098 45% 61,877 61,877 28,098 45%
Aug 131,774 119,768 91% 193,652 193,652 119,768 62%
Sep 182,775 376,426 376,426
Oct 222,412 598,838 598,838
Nov 224,718 823,556 823,556
Dec 216,894 1,040,449 1,040,449
Jan 218,148 1,258,598 1,258,598
Feb 307,480 1,566,078 1,566,078
Mar 339,343 1,905,421 1,905,421
Apr 379,924 2,285,345 2,285,345
May 406,215 2,691,560 2,691,560
Jun 470,205 3,161,765 3,161,765
Total: 3,161,765 147,866 5% 3,161,765 3,161,765
Capital Expenditure trend from 2001/02 to 2008/09
3,500
Budget
3,000
Actual
2,500
2,000
Rm
1,500
1,000
500
0
2001/02 Full 2002/03 Full 2003/04 Full 2004/05 Full 2005/06 Full 2006/07 Full 2007/08 Full 2008/09 Orig
Year Actual Year Actual Year Actual Year Actual Year Actual Year Actual Year Actual Budget PART
YEAR ONLY
9
Annexure C (continued)
Capital expenditure charts
Figure 1: CoT capital expenditure - monthly actual v budget
600,000
2007/08 actual
Original Budget
500,000
Current Budget
2008/09 Actual for month
400,000
300,000
200,000
100,000
Figure 2: CoT capital expenditure - year-to-date actual v budget
3,500,000
2007/08 actual
3,000,000 Original Budget
Current Budget
2,500,000
2008/09 Actual f or month
2,000,000
1,500,000
1,000,000
500,000
10
Annexure D
CITY OF TSHWANE - CASH FLOW STATEMENT for the period ended 31 August 2009
Preceding Current Year 2008/09
Year 2006/07
NT Audited Approved August YTD August YTD August YTD August YTD Full Year
Code Actual Budget Target Actual % Budget Variance Forecast
Description
R'000 R'000 R'000 R'000 % R'000 R'000
Opening Cash Balance 0100 364,666 624,617 624,617 171,964 28% (452,652) 624,617
Add : Receipts 0200
- Revenue receipts (incl consumer debtors) 0300 5,990,737 8,938,315 1,154,686 1,262,325 14% 107,639 8,938,315
- External loans received 0400 636,453 822,000 347,168 42% 347,168 822,000
- Grants and subsidies 0500 1,566,094 2,686,859 450,571 504,114 19% 53,543 2,686,859
- Public donations 0600 165,567 138,000 0% 138,000
- Investments redeemed 0700 160,359 28,056 4,676 151,620 540% 146,944 28,056
- Consumer deposits 0800 21,487 72,432 12,072 2,534 4% (9,538) 72,432
- Receipts from long-term debtors 0900 101,865 125,156 20,860 15,326 12% (5,534) 125,156
- Insurance claims 1000 28,000 4,667 0% (4,667) 28,000
- Statutory Receipts (incl VAT) 1100 111,839 188,358 31,393 71,883 38% 40,490 188,358
- Other 1200 860,586 1,020,591 62,158 242,030 24% 179,872 1,020,591
Sub-Total (Receipts) 1300 9,614,986 14,047,766 1,741,083 2,596,999 19% 855,916 14,047,766
Less : Payments 1400
- Salaries, wages and allowances 1500 2,457,950 3,311,378 512,370 445,743 14% (66,627) 3,311,378
- Cash and creditor payments 1600 4,745,668 6,213,729 447,429 812,936 13% 365,507 6,213,729
- Capital payments 1700 1,335,222 2,943,648 294,365 147,866 5% (146,499) 2,943,648
- Investments made 1800 71,259 153,732 151,945 99% 151,945 153,732
- External loans repaid 1900 390,731 447,861 0% 447,861
- Statutory Payments (incl VAT) 2000 170,053 48,560 8,093 0% (8,093) 48,560
- Consumer deposits repaid 2100 21,487 72,432 12,072 0% (12,072) 72,432
- Other payments 2200 205,261 698,895 116,148 830,106 119% 713,958 698,895
Sub-Total (Payments) 2300 9,397,631 13,890,234 1,390,477 2,388,596 17% 998,119 13,890,234
Closing Balance 2400 582,021 782,149 975,223 380,367 25% (594,855) 782,149
11
Annexure E
CITY OF TSHWANE - OUTSTANDING DEBTORS STATEMENT for the period ended 31 August 2009
Current Year 2008/09
0- 31 - 61 - 91 - 121 - 151 - 181 Days - Over 1 Total Bad
NT 30 Days 60 Days 90 Days 120 Days 150 Days 180 Days 1 Year Year - Debts
Detail Code
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Debtors Age Analysis By Income Source
Water Tariffs 1200 60,288 32,350 15,300 15,585 9,856 237,524 39,153 410,057
Electricity Tariffs 1300 133,762 52,010 28,526 14,084 9,055 250,533 37,590 525,560
Rates (Property Rates) 1400 104,963 53,060 32,879 24,315 23,074 382,846 35,813 656,950
Sewerage / Sanitation Tariffs 1500 13,922 7,143 3,755 3,504 2,069 60,287 9,890 100,570
Refuse Removal Tariffs 1600 12,890 8,074 4,453 4,352 3,270 127,480 8,725 169,245
Housing (Rental Income) 1700 3,083 1,069 798 499 751 60,306 66,506
RSC Levies 1800 2,320 1,686 431 429 6 10,443 15,314
Other 1900 52,819 4,413 12,477 23,750 13,327 636,321 74,670 817,777 21,750
Total By Income Source 2000 381,726 160,439 99,874 86,520 61,831 1,755,302 216,284 2,761,976 21,750
Debtors Age Analysis By Customer Group
Government 2200 25,733 7,188 4,944 2,059 1,702 (5,452) 5,289 41,463
Business 2300 115,904 33,528 23,346 20,223 16,122 289,517 17,331 515,971
Households 2400 196,345 99,735 52,441 56,436 42,900 1,243,771 186,362 1,877,990
Other 2500 43,745 19,989 19,144 7,802 1,106 227,466 7,301 326,553 21,750
Total By Customer Group 2600 381,726 160,439 99,874 86,520 61,831 1,755,302 216,284 2,761,976 21,750
Aged Debtors
1,800,000
31 August 2007/08
1,600,000 31 August 2008/09
1,400,000
1,200,000
1,000,000
R'000
800,000
600,000
400,000
200,000
0- 31 - 61 - 91 - 121 - 151 - 181 Days -
30 Days 60 Days 90 Days 120 Days 150 Days 180 Days 1 Year
Debtors O/S by Category
2,000,000 31 August 2007/08
31 August 2008/09
1,800,000
1,600,000
1,400,000
1,200,000
R'000
1,000,000
800,000
600,000
400,000
200,000
Government Business Households Other
12
Annexure F
CITY OF TSHWANE - OUTSTANDING CREDITORS STATEMENT for the period ended 31 August 2009
Current Year 2008/09
0- 31 - 61 - 91 - 121 - 151 - 181 Days - Over 1 Total
NT 30 Days 60 Days 90 Days 120 Days 150 Days 180 Days 1 Year Year -
Detail Code
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Bulk Electricity 0100 325,213 325,213
Bulk Water 0200 57,490 57,490
PAYE deductions 0300 29,522 29,522
VAT (output less input) 0400 (24,885) (24,885)
Pensions / Retirement deductions 0500 36,797 36,797
Loan repayments 0600
Trade Creditors 0700 806,997 806,997
Auditor General 0800 403 403
Other 0900
Total By Customer Group 1000 1,231,537 1,231,537
Outstanding Creditors by Category
900,000
800,000 31 August 2007/08
31 August 2008/09
700,000
600,000
500,000
R'000
400,000
300,000
200,000
100,000
Bulk Electricity Bulk Water PAYE VAT (output Pensions / Loan Trade Auditor
(100,000) deductions less input) Retirement repayments Creditors General
deductions
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Annexure G
Key performance indicators
Annual
Actual Budget Actual Budget Actual YTD
Description Targets
2006/07 2007/08 2007/08 2008/09 2008/09
2008/09
Restructuring grant indicators
Capital expenditure budget indicator (1) 86% 95% 85% 98% 100% 4.7%
Depreciation + external interest paid to TOI (1) 10.8% 11.7% 9.8% 15.0% 10.3% 6.9%
Employee costs to TOI 29.8% 28.8% 28.5% 28.0% 28.0% 30.6%
Net debtors to TOI 33.3% 18.3% 30.6% 14.0% 15.0% 19.8%
Annualised debtors collection - year-on-year 98.1% 98.0% 101.4% 98.0% 98.0% 102.0%
Repairs & Maintenance to TOI 9.0% 11.7% 16.0% 14.0% 12.2% 13.7%
Creditors days o/s 30 30 30 30 30 30
Debt management
Depreciation to Opex 6.7% 7.8% 6.3% 7.2% 6.0%
Interest as % of Revenue 3.7% 3.7% 3.4% 2.8% 0.1%
Loan repayments % Revenue 3.7% 10.5% 9.4% 6.3% 0.0%
Borrowing Management
Capital Charges to Operating Expenditure 10.5% 11.9% 10.0% 10.3% 6.1%
Revenue Management
Consumer debtors > 90 days 75.0% 81.5% 73.7% 77% 77%
Outstanding Debtors to Revenue 31.4% 17.0% 28.6% 13.7% 21.7%
Creditors Management
Creditors System Efficiency 100.0% 100.0% 100.0% 100.0% 100.0%
IDP regulation financial viability
i. Debt coverage 11.2 5.5 6.3 12.5 1.2
ii.O/S Service Debtors to Revenue 31.4% 20.2% 27.2% 13.7% 18.0%
iii. Cost coverage 1 0.9 0.7 0.5 3.1
Effectiveness
Capex benefit ratio 14.1% 18.2% 16.4% 21.6% 8.2%
Notes
(1) Budget targets and actuals are the year-to-date expenditure, ie for August 2008 compared to the 'year-to-date' targets
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Annexure H
Investment Portfolio
CITY OF TSHWANE - INVESTMENT PORTFOLIO for the period ended 31 August 2009
Current Year 2008/09
Contractual/ Cost Balance as at New Matured/ Interest Balance as at % Movement % of
Detail
Price as at 01 August 2008 Investment Realised Capitalised 31 August 2008 Increase/ Portfolio
01 July 2008 (Decrease)
R'000 R'000 R'000 R'000 R'000 R'000 % %
Zero Coupon Bonds 456,705.6 456,705.6 0.0 0.0 0.0 456,705.6 0.0% 56.2%
Stock Bonds 6,057.0 6,057.0 0.0 0.0 0.0 6,057.0 0.0% 0.7%
Assurance Policies 7,745.9 7,745.9 0.0 0.0 0.0 7,745.9 0.0% 1.0%
Money Market funds (Restructuring) 123,754.2 123,927.6 0.0 0.0 1,223.5 125,151.1 1.0% 15.4%
Annuity 14,773.2 14,773.2 0.0 0.0 477.5 15,250.7 3.2% 1.9%
Money Market funds (Contingency) 51,501.0 201,309.2 0.0 0.0 532.2 201,841.4 0.3% 24.8%
Short term 151.9 151.9 410,000.0 411,427.9 1,276.0 - -100.0% 0.0%
Total 660,688.8 810,670.4 410,000.0 411,427.9 3,509.2 812,751.7 0.3% 100.0%
INVESTMENT PORTFOLIO PER MONTH
500,000.0
450,000.0 Balance: 01 August 2008
400,000.0 Balance: 31 August 2008
350,000.0
300,000.0
250,000.0
200,000.0
150,000.0
100,000.0
50,000.0
-
Zero Coupon Bonds Stock Bonds Assurance Policies Money Market funds Annuity Money Market funds Short term
(Restructuring) (Contingency)
INVESTMENT PORTFOLIO - CUMULATIVE
500,000.0
450,000.0
400,000.0 Jul-08 Aug-08
350,000.0
300,000.0
250,000.0
200,000.0
150,000.0
100,000.0
50,000.0
-
Zero Coupon Bonds Stock Bonds Assurance Policies Money Market funds Annuity Money Market funds Short term
(Restructuring) (Contingency)
15
Annexure I
Explanation of legal requirements
Section 71 of the MFMA requires that the monthly report should contain:
(a) actual revenue, per revenue source;
(b) actual borrowings;
(c) actual expenditure, per vote;
(d) actual capital expenditure, per vote;
(e) the amount of any allocations received;
(f) actual expenditure on those allocations, excluding expenditure on-
(i) its share of the local government equitable share; and
(ii) allocations exempted by the annual Division of Revenue Act from compliance with
this paragraph; and
(g) when necessary, an explanation of-
(i) any material variances from the municipality's projected revenue by source, and
from the municipality's expenditure projections per vote;
(ii) any material variances from the service delivery and budget implementation plan;
(iii) any remedial or corrective steps taken or to be taken to ensure that projected
revenue and expenditure remain within the municipality's approved budget.
The statement must also include:
(a) a projection of the relevant municipality's revenue and expenditure for the rest of the
financial year, and any revisions from initial projections; and
(b) the prescribed information relating to the state of the budget of each municipal entity
as provided to the municipality in terms of section 87(10).
(3) The amounts reflected in the statement must in each case be compared with the
corresponding amounts budgeted for in the municipality's approved budget.
(4) The statement to the provincial treasury must be in the format of a signed document
and in electronic format.
Further, in terms of Government Notice 27431 dated 1 April 2005, regarding the “Local
Government: Municipal Finance Management Act 2003 Municipal Investment Regulations:
the following is applicable:
Reporting requirements:
9.(1) The accounting officer of a municipality or municipal entity must within 10 working
days of the end of each month, as part of the section 71 report required by the Act,
submit to the mayor of the municipality or the board of directors of the municipal
entity a report describing in accordance with generally recognised accounting
practice the investment portfolio of that municipality or municipal entity as at the end
of the month.
(2) The report referred to in sub regulation (1) must set out at least –
(a) the market value of each investment as at the beginning of the reporting
period;
(b) any changes to the investment portfolio during the reporting period;
(c) the market value of each investment as at the end of the reporting period;
and
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(d) fully accrued interest and yield for the reporting period.
[Highlighted requirements are further explained below].
Certain ‘prescribed’ municipalities are required to provide their financial reports to the
National Treasury, in lieu of the Provincial Treasury. This includes the CoT. National
Treasury have indicated that they wish to continue to directly monitor municipalities that
have a significant impact on the South African economy. For this purpose the required
electronic reports were progressively lodged with the National Treasury by or on 12
September 2008, (ten working day limit). These reports are:
• Statement of Financial Performance (OSA)
• Capital expenditure report (CAA)
• Cash Flow Statement (CFA)
• Outstanding Debtors report (AD)
• Outstanding Creditors report (AC)
The specific format for the report required to be submitted to the Executive Mayor, as
referred to in section 71(1), has not yet been prescribed. Therefore, this report is based
upon the content and format of the monthly electronic reports provided to National
Treasury. The information provided to National Treasury is published quarterly; therefore it
is prudent that the Executive Mayor’s report be prepared on a similar basis to ensure
alignment.
Section 71(1)(e) refers to a requirement to report on ‘allocations’ received. The term
‘allocations’, refers to government grants received from other spheres of government.
These are reported upon in the Statement of Financial Performance.
The definition of a revenue ‘vote’ has been determined by National Treasury. Annexure A
contains this information. However, each municipality may determine the vote format for its
expenditure, provided it also supplies Government Financial Statistical (GFS) analysis.
The information provided in the Corporate monthly financial report to Council is in
accordance with the CoT vote structure. However, this report is prepared in accordance
with the National Treasury standard, which will assist with benchmarking performance with
other municipalities.
Section 87 is a requirement to report on the performance of municipal entities. This
information has been requested. However, as at the time of preparation of this report the
municipal entity reports had not been finalised.
The market value of the investment portfolio at the time of preparation of this report had not
been obtained. Hence the contractual/ cost price of the investment portfolio has been
utilized.
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