AGENDA &MINUTES of a FINANCE COMMITTEE MEETING held on of the Speaker... · Finance Committee Index...

AGENDA &MINUTES

of a

FINANCE COMMITTEE MEETING

held on

12-07-17

SOL PLAATJE MUNICIPALITY

Office of the Municipal Manager Kimberley

03 July 2017

MEMBERS: Cllr O E Matshedisho (Chairperson) Cllr W M Keetile Cllr T H Mpanza Cllr B J Makhamba Cllr C Phiri Cllr R Liebenberg NOTICE is hereby given that a FINANCE COMMITTEE meeting of the City Council will be held in the Council Chamber, Civic Offices, Kimberley on WEDNESDAY, 12 JULY 2017 at 09:00. CLLR O E MATSHEDISHO CHAIRPERSON

AGENDA AND MINUTES Finance Committee Index 12 July 2017

i

A. APPLICATION FOR LEAVE 1

B. CONFIRMATION OF MINUTES 1

1. Finance - 14.06.17 (FIN16/06/17 - FIN38/06/17)

C. PRESENTATION 1

None

D. MATTERS ARISING

FIN38/07/17

1. ECN41/06/17: Tabling of the Preferential Procurement Policy Regulations

2 1 - 25

FIN39/07/17

2. FIN18/06/17: Report on Mayor's Fleet Management and Procurement Process

7

FIN40/07/17 3. FIN21/06/17: Report on Fleet Hiring v Purchasing 7 E. DIRECTORATE REPORTS

FIN41/07/17 1. Investments 8 1 – 2 FIN42/07/17 2. Capital Expenditure Report 9 3 - 5 FIN43/07/17 3. Bank Reconciliation 10 6 FIN44/07/17 4. Expenditure Analysis 11 7 – 16 FIN45/07/17 5. Debtors Age Analysis Report 12 17 – 19 FIN46/07/17 6. Creditors Age Analysis Report 12 20 FIN47/07/17 7. Report on amounts owing by Councillors and Staff 13 21 – 26

FIN48/07/17 8. Report on Debt Settlements Incentives 14 27 FIN49/07/17 9. Indigents Debt Write-off Report 15 28 - 30 FIN50/07/17 10. Status Report of the ICT Manager on the

Implementation of Competency Regulations 29967 of the 15th of June 2007

16

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SOL PLAATJE MUNICIPALITY AGENDA AND MINUTES OF A FINANCE COMMITTEE MEETING HELD ON WEDNESDAY, 12 JULY 2017 AT 09:00

PRESENT: Members

Cllr O Matshedisho (Chairperson) Cllr R Liebenberg Cllr W Keetile Cllr C Phiri Cllr T H Mpanza Non Members Cllr F L Phiri

General Manager: Revenue Management (A Klopper), Manager: Budget & Treasury (J J Wagner) Budget & Treasury: Control Accountant (B Anthony), Manager: Billing (B Booth), and the Administrator: Committee Services (D Botha) and Assistant Administrator (J Knox).

A. APPLICATION FOR LEAVE

None

ABSENT WITHOUT LEAVE Cllr B J Makhamba

B. CONFIRMATION OF MINUTES

RESOLVED:

That the agenda and minutes of the Finance Committee meeting held on 14 June 2017 be adopted and approved.

C. PRESENTATION

None

AGENDA AND MINUTES Finance Committee 12 July 2017 Office of the CFO D. MATTERS ARISING

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1. ECN41/06/17: Tabling of the Preferential Procurement Policy Regulations (CFO: Ms Z.L. Mahloko) 19 April 2017

At a Special Economic Development, UR & Tourism committee meeting held 27 June 2017 it was resolved per resolution ECN41/06/17:

1. That the report be noted within the committee.

2. That the Finance section together with the LED sections creates awareness in terms

with the amendments of the policy framework.

3. That the item be referred to the Finance committee for recommendation to Council.

Purpose The purpose of the item is to present the latest Preferential Procurement Regulations 40558 issued on the 20 of January 2017 and the implementation strategy of the regulations. For noting / for decision by The following options exist in terms of noting / for decision by:

Council (to approve)

The item/report has been considered by a portfolio committee. This item is for recommendation by the Executive Mayor to Council.

Background The Municipal Finance Management Act 56 of 2003, with specific reference to Chapter 11 titled “Goods and Services” Section 112 (1) (e) – (h), states that 112. (1) The supply chain management policy of a municipality or municipal entity

must be fair, equitable, transparent, competitive and cost-effective and comply with a

prescribed regulatory framework for municipal supply chain management, which must

cover at least the following:

(e) open and transparent pre-qualification processes for tenders or other bids;

(f) competitive bidding processes in which only pre-qualified persons may participate;

(g) bid documentation, advertising of and invitations for contracts;

(h) procedures and mechanisms for—

(i) the opening, registering and recording of bids in the presence of interested persons;

(ii) the evaluation of bids to ensure best value for money;

(iii) negotiating the final terms of contracts; and

(iv) the approval of bids;

The PPPFA of 2000 as such gives further guidance to municipalities in their means to comply with the above extracted section and sub-section of the MFMA. In terms of the Municipal Scorecard, it has been part of performance measurement to procure goods and services to local suppliers as part of promotion of local economic development and job creation opportunities. All relevant role players in the Supply Chain Management systems of the Sol Plaatje Municipality must implement its policy in a way that gives effect to section 217 of the


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Constitution and Part 1 of chapter 11 of the MFMA and other applicable legislation. It is therefore required from Sol Plaatje Municipality to establish and implement an effective system to adhere to the new regulation. The new regulations, issued by the Minister of Finance were revised to align with certain changes to the B-BBEE legislation. The legislation encourages procurement from Small Enterprises, particularly through subcontracting if a tender is set above R30 Million threshold. The regulations focus on the need by all organs of state and public entities to specify conditions that only local produced good or locally manufactured goods meeting the stipulated minimum threshold for local production and content will be considered for certain designated sectors. They also afford organs of state the freedom to choose to apply pre-qualifying criteria to advance certain designated groups. If applied with the pre-qualifying criteria and sub-contracting requirements, the Regulations could have the far-reaching empowerment effect with its predecessors sorely lacked. If not utilised, there will be pressure on organs of the state to motivate why these qualifying criteria and sub-contracting requirements are not being applied. Small businesses that have been battling to get Government departments to accept their B-BBEE Affidavits when tendering, will be pleased to note that the Regulations now clearly stipulate that an Affidavit as prescribed by the B-BBEE Codes of Good Practice is acceptable proof of B-BBEE status. Sworn Affidavits and SANAS Accredited B-BBEE Verification Agency certificated are the only acceptable from of proof of B-BBEE Status All tender documents must:

Stipulate the preference point system applicable;

Determine whether pre-qualification criteria are applicable

Determine whether the goods or services are in a designated sector for local production and content;

Determine whether compulsory sub-contracting is applicable: and

Determine whether objective criteria are applicable One major area of change is the freedom which the Regulations afford the organs of state to choose to apply pre-qualifying criteria to advance certain designated groups. This will allow them to focus for example on promoting Women Empowerment, Small Business Empowerment, Disability Empowerment or Black Empowerment.

Any tender which does not meet with this pre-qualification will be unacceptable, The criteria which the organ of the state can apply for pre-qualification are the tenderer:

Must have a stipulated BBBEE status level

Must be an EME (exempted micro enterprise ) or QSE (qualifying small business enterprise )

Must sub-contract a minimum of 30% of the value of the contract to:

EME or QSE which is at least 51% black owned;

EME or QSE which is at least 51% owned by black youth (from the ages 14 to 35);

EME or QSE which is at least 51% owned by black people who are women;

EME or QSE which is at least 51% owned by black people with disabilities;

EME or QSE which is at least 51% owned by black people living in rural or underdeveloped areas or townships;

A cooperative which is at least 51% owned by black people;

An EME or QSE which is at least 51% owned by black people who are military veterans


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An EME or QSE. A significant change in the Regulations is the requirement to sub-contract for contract valued above R30 million, if feasible, in order to advance designated groups. It must be advertised in the tender documents as a specific tender condition that a minimum of 30% of the value of the contract must be contracted to:

An EME or QSE

EME or QSE which is at least 51% black owned

EME or QSE which is at least 51% owned by black youth (from ages 14 to 35)

EME or QSE which is at least 51% owned by black people who are women

EME or QSE which is at least 51% owned by black people with disabilities

EME or QSE which is at least 51% owned by black people living in rural or underdeveloped areas or townships

A cooperative which is at least 51% owned by black people

EME or QSE which is at least 51% owned by black people who are military veterans or

More than one of the categories above All categories of the businesses listed above should ensure that they are registered on the National Treasury Supplier Database. The preference point system was also amended. For acquisition of goods and services for a Rand Value equal to or above R30.000-00 and up to R50 million a 80/20 formula must be used. Price score is 80 and B-BBEE status is 20. The previous thresholds were R30, 000-00 AND R1 million for 80/20 – above R50 million the 90/10 formula must be used. Implementation Plan Discussions took place between the Chairperson of the Economic Development, Urban Renewal and Tourism Committee, CFO, General Manager LED, Manager LED SMME Support, and the Manager SC. Further discussions between the CFO AND Manager Supply Chain took place to finalise the detail of the implementation plan.

Competitive Bidding Process The procurement plan template was amended to accommodate for the pre-qualification criteria for the PPPF, Reg. 2017 for bids on a case by case basis.

All procurement plans together with the specifications and special conditions will be tabled before a Special Demand Management Committee who will be represented by LED, SCM and the Line Manager. The pre- qualification criteria if relevant will be recorded together with the relevant motivations (called Annexure A of the procurement plan). This will forwarded to the ED. SEDP and CFO for final comments. The pre-qualification criteria selected must be motivated and justified and will be based on the supplier’s data base of LED.

The final specifications special conditions and pre-qualification criteria will be forwarded to the Demand Manager who will compile a complete bid document for the consideration and approval of the BSC.

After opening of the bids and during pre-evaluation only bids that meet the pre-qualification requirements will be considered.


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Formal Written Quotations Specifications and special conditions of the requirements must be forwarded to the Demand Manager and forwarded to the Manager Supply Chain for comments who will return it to the Demand Manager. The draft quotation will be forwarded to the General Manager LED’s office for comments, then forwarded to the CFO for consideration and then to the Manager Supply Chain for final processing.

Thresholds All bid documents have been amended to accommodate the new 80/20 preference point system.

Designated Sectors The relevant MBD6.2 (Local production and content document) is included with all other relevant documents (MBD’s) during the compiling of a draft tender document. This is the responsibility of the Demand Manager and it is done on a case by case basis. The Supply Chain Risk office verifies all submissions before it is then submitted to the BSC. The BSC considers and after approval will include it as a special condition of the tender. Only bidders that completed the MBD 6.2 in full will be considered for evaluation. Subcontracting

Subcontracting as a special condition will be considered by the Special Demand Management Committee and the same process followed as that of competitive bidding as explained. Subcontracting for contracts above R30 Million will only be followed if found to be feasible by the Special Demand Management Committee

Annexures ANNEXURE Preferential Procurement Policy Framework Act of 2000 p 1 - 12 Preferential Procurement Regulations of 2017 p 13 - 25 Motivation

The above listed policies had been reviewed to take into account new developments as well

as to bring in innovation, back to basics principles and customer care and Batho Pele

principles.

Personnel Implications In implementing the policy, only internal personnel shall be responsible for the implementation of the Act, as part of their job description. As such serving or participating in the proposed ad-hoc committee shall not result in an additional costs to company. However, training may be necessary to capacitate role players in terms of understanding the legislation and its implication. This will be done within the allocated budget to each cost centre. Financial Implications There shall be no additional financial implications, other than as budgeted for, for human resources, training and development and municipal running costs.


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Legal Authority and Implications

The Constitution of the Republic of South Africa

The Municipal Finance Management Act 56 of 2003 Preferential Procurement Policy Framework Act 2000: Preferential Procurement Regulations 40553 of 20 January 2017. Consultation The Executive Mayor, Municipal Manager, all Executive Directors and Senior Managers were consulted.

Contact Person Chief Financial Officer: Ms. Z.L. Mahloko ED: SEDP: Mrs N. Tyabashe-Kesiamang For enquiries Chief Financial Officer – Z.L. Mahloko

RECOMMENDATION:

It is resolved to recommend that council notes:

1. The Preferential Procurement Policy framework 10864 of 20 January 2017, with effective date of 1 April 2017.

2. The implementation plan as outlined in the item.

3. The achievements as a result of implementing this policy shall be reported to the LED Tourism and Urban Renewal, Finance and IDP, Budget and Performance Management committees of Council, for the purposes of noting the impact made to local businesses and those classified as EME’s, SQE.

FIN38/07/17: RESOLVED

1. That the registration of all SMME’s on the database of Sol Plaatje

be discussed by the Chief Financial Officer and the LED section.

2. That timeframes be implemented.

RESOLVED TO RECOMMEND TO EXECUTIVE MAYOR

3. That the report be noted. __________________________________________________________________________


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2. FIN18/06/17: Report on Mayor’s Fleet Management and Procurement Process (M.A 14.06.17)

At the Finance committee meeting held on 14 June 2017 it was resolved per resolution FIN18/06/17: That the CFO submits a report on the Mayor’s Fleet Management and procurement process and includes the rental of vehicles and dates for usage of rentals at the next Finance Committee meeting

AWAIT WRITTEN REPORT


That the item be held in abeyance until the next committee

meeting and the reason be given why report is delayed.

__________________________________________________________________________ 3. FIN21/06/17: Report on Fleet Hiring v Purchasing

(M.A14.06.17)

At the Finance committee meeting held on 14 June 2017 it was resolved per resolution FIN21/06/17:

1. That the CFO conduct a study on hiring of fleet versus purchasing and submits a report for the next meeting.

AWAIT WRITTEN REPORT


That the item be held in abeyance and a reason for delay of

submitting the report be provided at the next committee

meeting.

__________________________________________________________________________

AGENDA AND MINUTES Finance Committee 12 July 2017 Office of the CFO E. DIRECTORATE REPORTS

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1. Investments (G H Akharwaray) 31 May 2017

Purpose To report to the Finance Committee, the balances of cash and cash equivalent balances as at 30 May 2017. For noting / for decision by This item is for noting by the Executive Mayor. Background This report is intended to inform the Committee on the investment balances. In terms of the Cash and Investment Policy, any excess funds that are not utilised must be invested to earn interest. The interest earned on investments is budgeted for. We strive to get competitive interest from the A+ banks regularly. Annexure description The figures detailed in the attached schedules indicate the opening and closing balances of investments as well as amounts invested and withdrawn during the months of May 2017

ANNEXURE

p. 1 - 2 Motivation None Personnel Implications None Financial Implications None Legal Authority and Implications None Consultation None Contact Person I Kgakane Control Accountant: Investments Contact number: 053-8306579


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FOR INFORMATION

FIN41/07/17: RESOLVED TO RECOMMEND TO EXECUTIVE MAYOR That the report be noted.

2. Capital Expenditure Report (B Anthony) 31 May 2017

Purpose To report to the Finance Committee progress on capital projects for the month of May 2017. For noting / for decision by This item is for noting by the Executive Mayor. Background None Annexure description Progress reports

ANNEXURE p. 3 - 5 Motivation None Personnel Implications None Financial Implications None Legal Authority and Implications As required in terms of the Municipal Finance Management Act, section 81(1) (e). Consultation None Contact Person B Anthony Financial Manager: Budget & Treasury Contact number: 053-8306437


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FOR INFORMATION


3. Bank Reconciliation (Mrs A Marais) 31 May 2017

Purpose To provide Council with a bank reconciliation of the General Cashbook on a monthly basis. For noting / for decision by This item is for noting by the Executive Mayor. Background None Annexure description Bank reconciliation for the month of May 2017. ANNEXURE

p. 6 Personnel Implications None Financial Implications None Legal Authority and Implications None Consultation None Contact Person Mrs A Marais Control Accountant: Budget & Treasury

FOR INFORMATION



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4. Expenditure Analysis (O Senye) 31 May 2017

Purpose To inform Council regarding the state of the municipal budget (expenditure) for the month of May 2017. For noting / for decision by This item is for noting by the Executive Mayor. Background In terms of section 71(1)(c) of the MFMA the Accounting Officer of the municipality must not later than 10 days after the end of each month submit to the Mayor of the municipality and the relevant Provincial Treasury in the prescribed format, on the state of the municipal budget (expenditure) reflecting the actual expenditure per vote. Annexure description Expenditure reports

ANNEXURE p. 7 - 16 Personnel Implications None Financial Implications None Legal Authority and Implications Section 71 (1)(c )of the MFMA Consultation None Contact Person J Mopharing Manager: Expenditure Contact number: 053-8306810

FOR INFORMATION FIN44/07/17: RESOLVED

That the item be held in abeyance for clarification by the

Chief Financial Officer.


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5. Debtors Age Analysis Report (Ms B Booth) 31 May 2017

Purpose To keep Council informed about the status of Debtors as at end of May 2017. For noting / for decision by This item is for noting by the Executive Mayor. Background Section 71(1) of MFMA Act 56 of 2003 prescribes that the Accounting Officer of the Municipality must not later than 10 working days after the end of each and every month submit to the Mayor of the municipality and the relevant National and Provincial Treasury a statement in the prescribed format on the state of municipal debtors. Annexure description Debtors Age Analysis Report Report on Collection Rate

ANNEXURE p. 17 - 19 Legal Authority and Implications

Sec 71 of MFMA

Consultation

Executive Director / Municipal Manager / GM: BTO / Financial Managers

Contact Person Mrs B Booth Assistant City Treasurer Contact number: 053-8306505 FOR INFORMATION


6. Creditors Age Analysis Report (Mrs C J van Rensburg) 31 May 2017

Purpose To keep Council informed about the status of Creditors. Attached is the analysis report for the month of May 2017.


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For noting / for decision by This item is for noting by the Executive Mayor. Background

MFMA Section 71 requires the Accounting Officer to table a report to the Mayor of a

municipality an aged creditor’s analysis for the period.

It should be noted that Sol Plaatje Municipality pays its creditors within 30 days from date of

receipt on an invoice and payment documents by Expenditure Department.

Annexure description Creditors Age Analysis Report ANNEXURE p. 20 Financial Implications

None – as all Creditors are paid in terms of the approved budget.

Legal Authority and Implications

Sec 71 of MFMA

Consultation

Executive Director / Municipal Manager / GM: BTO / Financial Managers

Contact Person G J Mopharing Manager: Expenditure Contact number: 053-8306810

FOR INFORMATION


7. Report on amounts owing by Councillors, Staff and Departments. (KE Ramzan) 31 May 2017

Purpose To inform Council regarding the state of Councillors and Staff debt as at 31 May 2017 For noting / for decision by This item is for recommendation by the Executive Mayor to Council.


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Background Pursuant to the Local Government: Municipal Systems Act, 32 of 2000 as well as a request by Council, the outstanding amounts owed by certain Council members as well as staff is contained herein. Annexure Outstanding amounts owed by certain Council members ANNEXURE Detailed report of Provincial Government Department p. 21 - 26 Detailed report of National Government Department Legal Authority and Implications Local Government: Municipal Systems Act, 32 of 2000 Circular 2 of 2002 – Code of Conduct for Municipal staff Contact Person

KE Ramzan Manager: Acting Credit Control Contact number: 053-8306796

FOR INFORMATION


1. That a report on cutting of electricity services for different

Government Departments be submitted at the next

committee meeting.

2. That the administration be more diligent on implementing the garnishing orders for amounts owed by staff and councillors.

3. That the amounts owed by the Departments be a separate

report in future.

RESOLVED TO RECOMMEND TO EXECUTIVE MAYOR 4. That the report be noted.

8. Report on Debt Settlement Incentives (KE Ramzan) 31 May 2017

Purpose To inform Council about the value of incentives provided by Sol Plaatje Municipality to secure the settlement of debt by certain account holders.


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For noting / for decision by This item is for noting by the Executive Mayor. Background Pursuant to the Local Government: Municipal Systems Act, 32 of 2000 as well as a request by Council, the outstanding amounts owed by certain Council members as well as staff is contained herein. Annexure description Incentive Settlement Report – May 2017. ANNEXURE p. 27 Legal Authority and Implications Local Government: Municipal Finance Management Act, 56 of 2003 Sol Plaatje Municipality Credit Control, Customer Services and Debt Collection Policy Contact Person KE Ramzan Manager: Acting Credit Control Contact number: 053-8306796

FOR INFORMATION


9. Indigents Debt Write-off Report (L Marekwa) 31 May 2017

Purpose The purpose of this report is to inform Council of our Indigent Management activities for the month of May 2017. For noting / for decision by This item is for recommendation by the Executive Mayor to Council.

Background Section 71.1 of MFMA 2003 and Sol Plaatje Municipality’s Indigent Policy states that the Accounting Officer of the Municipality must not later than 10 working days after the end of each and every month, submit to the Mayor of the Municipality a statement in the prescribed format on the state of the municipal indigents debt write-offs.


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A substantial increase in the number of indigent registrations occurred as a result of our partnering with the Department of Housing where we shared information on the number of subsidies they had registered. Their income threshold and other requirements are very similar to those in the SPM Indigent Management Policy and it was this information that was used to assist in building our register. The large write-off figure is as a result of this surge in registrations. Annexure description ANNEXURE Indigent Write-off Report p 28 - 30 Legal Authority and Implications Local Government: Municipal Finance Management Act, No. 56 of 2003 Debt Collection By-law, No. 17 of 2006 Customer Care, Credit Control and Debt Collection Policy, 2012 Indigent Management Policy, 2012 Contact Person L Marekwa Head: Indigents Contact number: 053-8306563

FOR INFORMATION


__________________________________________________________________________ 10. Status Report of the ICT Manager on the Implementation of Competency Regulations 29967 of the 15th of June 2007.

Z.L. Mahloko Click to choose date item was written:

At the Finance committee meeting held 12 July 2017 it was resolved per resolution FIN50/07/17:


That the CFO submits a full status report on why the ICT manager is not registered and applied for exemption of the Implementation of Competency Regulations 29967 of the 15th of June 2007 at the next meeting.

__________________________________________________________________________


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The meeting closed at 10:05 _________________________ ____________________ CHAIRPERSON DATE

FINANCE COMMITTEE

12-07-17

ANNEXURES

PLEASE RETAIN ALL ANNEXURES UNTIL

ITEMS ARE FINALIZED AT ORDINARY COUNCIL

MEETING

FINANCE COMMITTEE

12-07-17

MATTERS ARISING

ANNEXURES p 1 - 25

FINANCE COMMITTEE

12-07-17

Directorate Reports

ANNEXURES p 1 - 30

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