AMATHOLE DISTRICT · based on accrued revenue. Billing is slightly more than anticipated, however...

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AGENDA

ITEM 7.1.2.2

FRIDAY, 27 JANUARY 2017

10H00

CONFIDENTIALNOT FOR PUBLICATION

AMATHOLE DISTRICTMUNICIPALITY

7.1.2.2 ITEM ON THE MID-YEAR BUDGET AND PERFORMANCE ASSESSMENT FOR2016/17

[FILE No: 5/1/R; 9/1/1][AUTHORS: ACFO/SYK; STRAT/RRL]

[EMC][Council: 27 January 2017]

PURPOSE

(i) To table to Council the Mid-year budget and performance assessment report for 2016/17for Amathole District Municipality (ADM) and its municipal entity, ASPIRE, for noting

(ii) To inform Council of the request by Aspire to supplement their operating expenditureallocation from ADM during the adjustment budget

(iii) To inform Council of the application for extensions and non-compliance with timeprovisions of Schedule G of the MBRR

(iv) To recommend to Council that an adjustment budget is required for 2016/17

AUTHORITY

- The Municipal Finance Management Act 56 0f 2003 (MFMA)- Municipal Budget and Reporting Regulations 2009 (MBRR)

LEGAL/ STATUTORY REQUIREMENTS

In terms of Section 72 (1)(a) of the Municipal Finance Management Act 56 of 2003, the accounting

officer is required by the 25th January of each year to assess the performance of the municipality

during the first half of the year taking into account –

(i) The monthly statements referred to in section 71 for the first half of the financial year;

(ii) The municipality’s service delivery performance during the first half of the financial year,and the service delivery targets and performance indicators set in the SDBIP;

(iii) The past year’s annual report and progress on resolving problems identified in the annualreport; and

(iv) The performance of every municipal entity under the sole or shared control of themunicipality.

(v) Submit a report on such assessment to:

i. The Mayor of the Municipality;

ii. The National Treasury; and

iii. The relevant Provincial Treasury

Section 34 deals with the publication of mid-year budget and performance assessments, stipulating

that “within five working days of 25 January each year the municipal manager must make the mid-

year budget and performance assessment public by placing it on the municipal website.

Section 35 deals with the submission, “The municipal manager must submit to the National

Treasury and the relevant Provincial treasury in both printed and electronic format”.

In terms of the MBRR, Part 5: In-year reports of municipalities:Section 33 gives guidance on the format of the mid-year budget and performance assessment,

“Must be in the format specified in Schedule C”

Applications for extension of time limits

60. (1) An application made in terms of section 27(2) of the Act must –

(a) be in the format contained in Schedule G;

(b) be signed and dated by the mayor;

(c) contain information on –

i. the specific time provision in respect of which an extension of a time

ii. limit or deadline is being applied for the reason why the municipality will not

comply with the relevant

iii. time provision; the impact, if any, of the non-compliance on the municipal council’s

ability to meet the deadline for approving the annual budget of a municipality set

in section 16(1) of the Act, and any steps to ensure this deadline is met;

iv. any implications on the finances, performance, governance and

accountability arrangements in the municipality that will be affected by the delay

in meeting the time limit or deadline and the measure taken to address such

implications;

v. the steps the municipality will take to ensure compliance with the

relevant time provision in future; and

vi. a list of non-compliances with time provisions by the municipality in the previous

three financial years.

BACKGROUND / REASONING

Section 71 of the MFMA requires that the accounting officer of the municipality must by no later

than 10 working days after the end of each month submit to the Mayor, national treasury and the

relevant provincial treasury in the prescribed format on the state of the municipality’s budget

reflecting particulars for that month and for the financial year up to the end of that month.

Section 72 of the MFMA requires that the accounting officer must by the 25th January of each year

assess the performance of the Municipality during the first half of the financial year, taking into

account the Section 71 reports and the SDBIP. As part of this review, recommendations are to be

made as to whether an adjustments budget and revised revenue and expenditure projections are

necessary. This report is to be submitted to the Mayor and National and Provincial Treasury by

25 January 2017.

The assessment aims at enhancing managements’ decisions and monitoring activities. In addition

the assessment can be utilized as a tool to assist in the management of cash flows and performance

management.

The monthly statements of the first half of the year

The monthly statements consist of seven Section 71 reports, which are submitted to National and

Provincial Treasury namely:

1. BSAC – Statement of Financial Position2. OSA – Statement of Financial Performance3. CFA – Cash Flow4. R&M – Repairs and Maintenance5. AD – Debtors Age Analysis6. AC- Creditors Age Analysis7. CAA – Capital Expenditure

(i) DRAFT MID – YEAR BUDGET AND PERFORMANCE ASSESSMENT OFAMATHOLE DISTRICT MUNICIPALITY

PROCESS FOLLOWED

For the purposes of the completion of this report, the original S71 reporting has been used as a

basis which shows the 6 months actual revenue and actual expenditure including capital

expenditure movements on the approved budget

With the migration to ADMaC, the preparation of the financial reports such as the S71, Schedule

C and the Financial Dashboard has presented significant challenges due to the Business

Intelligence Tool not being developed yet. As an interim measure reports are being prepared

manually with the assistance of the implementation team.

Financial Reports

[Refer to: Statement of Financial Position- DC12_BSAC_2017_M06]

Statement of

Financial

Position

This statement lists all Council’s ‘Current and Non-Current Assets’ and

‘Liabilities’ together with their financial values.

o Current

Assets

Current Assets refer to cash or resources that have cash value and are owned

by Council. All other assets expected to provide financial benefit to Council

within one financial year also fall under the category of ‘Current Assets’.Largest current asset is cash. This asset is highly liquid, meaning that cash is readilyavailable when required. For the 6 months ending 31 December 2016 the cashbalance is R323 million (inclusive of all accounts) which includes fixed deposits ofR27 million and R184 million unspent conditional grants.

Council has invested R27 million in two fixed deposit portfolios with differentinstitutions until utilisation. Funds were invested at an average return of 6.86%, thefixed deposits are reflected as follows:

INVESTEC R17 million

ABSA R10 million

There has been an increase of R192 million during the six month period ending 31December 2016, due to two tranches of MIG and Equitable Share being received inDecember and the payment of the DBSA Loan only being effected in January 2017as well as R32 million being received for Water Services Infrastructure Grant(WSIG)

o Current

Liabilities

Current Liabilities refer to trade and other payables (creditors), provisions and

accruals that are due/owed by Council. All other liabilities expected to be

settled within one financial year are included in the category of ‘Currentliabilities’.The largest current liabilities are the unspent portion of Conditional Grants,

Borrowings and the Creditors. For the six months ending 31 December 2016,

creditors amounted to R150 million, major contributors being Retention, Staff

Bonus, Accruals and Leave Provision. The amount owed to DBSA amounts to R42

million for the six months ending 31 December 2016 and unspent conditional grants

amount to R184 million.

o Non-

Current

Assets

Non-Current Assets are cash or resources with cash value which another party

has made a legal commitment to hand over to Council over a period exceeding

one financial year.

The Property, plant and equipment item remains the most material balance on the

statement of financial position, with a value of R4.5 billion. Of this R3.9 billion

pertains to infrastructure assets, hence reiterating the importance of having sound

controls and management in place for this item.

The cost to refurbish these must be considered to ensure that the required level

service is maintained. The infrastructure assets are required to generate own revenue

for the municipality and are thus crucial in service delivery.

ADM owns investment properties (mainly land) to the value of R155 million, yet an

insignificant portion of these properties are generating rental income. The future

utilisation of this land should be considered to assist in generating additional revenue

for the municipality.

o Non-

Current

Liabilities

Similarly liabilities are legal commitments with cash value which Council have

made to other parties.

The defined benefit obligation is the largest non-current liability at R239 million.

The post-employment medical aid benefit alone is R218 million. This obligation is

based upon valuations obtained from actuaries for all the municipality’s defined

benefit pension plans, post-employment medical benefits and long service in

accordance with GRAP 25 on Employee benefits.

A defined benefit plan is a retirement plan in which the municipality will have to

make good any short falls should the fund not perform. The risk thus lies with the

employer. The obligation also includes post-employment medical aid benefits and

long services. A valuation is received annually for these obligations from an actuary.

The obligation is increasing annually at an average rate of approximately 19%.

[Refer to: Statement of Financial Performance- DC12_OSA_2017_M06]

Financial

Performance

Variances between the actual performance and the budget of a function exceeding

10% over or under spending are to be explained and corrective measures

implemented if required. Corrective actions could include allocation corrections or

improved monitoring. These items requiring further investigation by each

department have been highlighted within the financial dashboard.

The statement of Financial Performance can be used to measure performance

and cash flow projections for both revenue and expenditure. Unauthorised

expenditure can also be identified using the variances identified as an indicator.

Expenditure trends can be analysed to project expenditure and take

preventative measures. Trend analysis can be used to improve the budget

process by using more realistic requirements. Unutilised funds can be identified

and invested in order to maximise returns within regulations.

REVENUE

SOURCE ANNUALBUDGET

REVENUE @ 31DECEMBER 2016

% REVENUERECEIVED/ACCRUED

Service charges 178 068 000 110 191 106 62%

Rental of property 2 056 542 159 123 8%

Interest earned externalinvestments

7 401 291 7 989 115 108%

Interest earned – outstandingreceivables

2 847 260 13 832 884 486%

Government grants 1 223 365 442 550 115 538 45%

Other income 458 590 683 5 954 110 1%

Service charges – Currently the year to date collection rate is only 46%. The actual figure is

based on accrued revenue. Billing is slightly more than anticipated, however based on actual

collections only R51 million cash is actually received. This may require the ADM to reduce

the budget on this item in line with realistically collectible revenue in accordance with Section

18 of the MFMA.

Rentals – includes external funds received from hiring of ADM owned properties. The ADM

anticipated to bill for rental of 40 Cambridge Street however there are no tenants as yet. The

ADM needs to consider reducing the budget on this line item in line with Section 18 of the

MFMA. Lease agreements must be reviewed and annual increments must be included in all

agreements.

Interest earned on outstanding receivables – budget is based on realistically collectible

revenue while the actual figures are accrued. The accrued basis refers to billed interest and not

actual cash received.

Interest earned external investments – the actual interest earned on bank accounts held by

ADM has been more favourable than anticipated. This has been attributable to funds awaiting

use being invested in call accounts yielding higher returns. This amount can therefore be

amended during the budget adjustment.

Government grants – Equitable Share, Levy Replacement Grant, FMG, MIG, RBIG, and

WSIG tranches received. There has been no indication from National Treasury that any of the

Grants in terms of DORA would be reduced in the remaining six months of the 2016/17

financial year. The entire MIG Grant allocation per DORA has been received.

Other income – “VAT savings” on conditional grants as allowed in terms of the Treasury

circular is recognised as own revenue. The impact of non VAT vendors is to be further

investigated to ensure that the budgeted figure is realistic. This item also includes revenue from

tanker clearances and insurance pay outs which is ad hoc.

CONCLUDING SUMMMARY

EXPENDITURE

TYPE ANNUAL BUDGET EXPENDITURE AS @31 December 2016

% SPENT

Employee related costs 646 855 683 305 543 793 47%

Remuneration ofCouncillors

15 025 841 5 402 932 36%

Bad debts 137 000 000 0 0%

Collection costs 788 185 357 615 45%

Depreciation 212 025 280 0 0%

Finance costs 32 485 891 6 024 482 19%

Bulk purchases 70 936 644 1 800 076 3%

Contracted services 28 041 369 13 815 693 49%

Other expenditure 219 956 322 94 593 103 43%

Employee Related Costs – remains the largest cost. The fixed nature of the salaries makes it

difficult to reduce the level of expenditure when compared to other operating expenditure.

Ensure prudence in the filling of vacated positions to ensure that adequate budget is available

till the end of the financial year.

Councillor Remuneration - the budgeted increases for councillors was also 7.5%, these have

not yet been effected as the regulating gazette specifying the remuneration packages as was not

yet issued by the end of December 2016. During the transition phase of the appointment of the

new Council, all Councillors were remunerated equally as ordinary Councillors until the

Mayoral Committee, Mayor and Speaker were appointed.

Bad debts – includes the provision for doubtful debt – provide for approximately 81% -

reasonability test based on subsequent receipts. There has been no need to increase the bad

debt provision thus far.

Collection costs - this budget includes an amount pertaining to legal fees incurred for debt

collection, this expenditure is ad hoc as it depends on when the need for an attorney/debt

The bank balance as at 31 December 2016 is R323 million. This is committed in terms of:

Unspent conditional grants - R184 million

Reserved for Salaries – R120 million (Salaries are projected at R60 million a month).

This leaves R19 million to pay existing creditors and committed operational costs.

collector arises. It also includes the costs paid to the appointed debt collector when monies

collected are paid over to ADM (on an 8% commission basis).

Depreciation – There have been no journal entries to account for depreciation, however the

budgeted amount is currently deemed to be sufficient.

Finance costs – includes the portion of interest on the defined benefit obligation as well as the

interest on the finance leases (for rental of printers and fax machines) and interest on DBSA

loan. The DBSA loan will be settled earlier hence resulting in an interest saving which can be

adjusted in the adjustment budget.

Bulk Purchases – this line item pertains to bulk water purchases from Amatola Water and

Department of Water and Sanitation. Due to cash flow constraints these invoices have not been

paid. Based on projections, the budget will require an increase.

Contracted services – includes the rentals of office accommodation, equipment and parking.

This expenditure is linked to contractual commitments. There are still outstanding payments

which may result in a need to increase the budget.

Other expenditure – includes items such as fleet costs (fuel & oil, tyres, repairs and

maintenance, admin costs, licences), telephone system rental, microsoft enterprise licences,

advertising and essential user re-imbursive costs. This figure also includes repairs and

maintenance on an ad hoc basis. Due to the level of detail and extensive requirements of the

new chart of accounts (mSCOA), delays in capturing payments are being encountered. As a

result the actual figure for December 2016 is understated. Based on projections to the end of

the financial year, the budget will require increasing.

Cash Flow

Statement

[Refer to: Cash Flow Statement- DC12_CFA_2017_M06]

The net cash inflow or outflow for the period is the difference between the

opening and the closing balance of the municipality’s cash. Only cash flow itemsare considered in the cash flow statement i.e. depreciation is excluded.

Cash on hand has increased by R192 million from June 2016 to December 2016. Theincrease is due to two tranches of Equitable Share, Financial Management Grant,Municipal Infrastructure Grant (the last tranche was paid earlier than envisaged),Regional Bulk Infrastructure Grant and Water Services Infrastructure Grant receivedduring the first half of the financial year.

The municipality is not able to generate sufficient own revenue through its servicecharges and is grant dependent. It is further indicative that cash flow must be closelymonitored to ensure that sufficient cash is available in the bank to effect payments.

The table below indicates that the bank balance. Year on year the balance isdecreasing, reflected in the June balances

Period Ending June2013

12months

June2014

12months

June2015

12months

June2016

12months

Dec2016

6months

Cash Position (R’m)

R191 R116 R80 R62 R323

Performa

nce

Indicators

Ratios are used to analyse trends and to interpret the municipality’s viability, the

result of which can prevent an undesired financial position in the future.

o Liquid

ity

ratio

Liquidity ratio provides an indication of the ADM’s ability to pay its short term

debts like suppliers within twelve months using the cash in the bank.

The ratio focuses on current assets (debtors, bank and cash, inventory) and current

liabilities (trade and sundry, provisions, accruals). The ratio is currently below the

acceptable norm. This ratio indicates the financial viability of the institution.

Norm/Benchmark2012/1312months

2013/1412months

2014/1512months

2015/1612months

2016/176months

2 : 1 3.2 : 1 3.5 : 1 1.4 : 1 0.8:1 1.5:1

These norms are the generally accepted benchmarks used by National Treasury(Circular 71). A declining liquidity ratio is indicative of future cash flowconstraints, hence it is prudent to monitor the ratio and maintain the ratio at 2:1.

The decrease in the ratios from June 2014 can mainly be attributed to the decreasein current assets due to cash withdrawals to fund operations, EPWP relatedprojects, refurbishment of water schemes. Debtors are not readily convertible intocash which is indicated by the collection rate of 46% for the mid-year ending 31December 2016. Thus potential cash is tied up in the outstanding debtors balance.

All commitments should be supported by available cash, meaning that themunicipality would be able to repay its commitments immediately and thus musthave cash to do this.

Currently the municipality has commitments in respect of internally fundedprojects of R11 million and R184 million on externally funded projects. It must beemphasized that the R27 million in fixed deposit accounts is being held to cashback part of this R184 million unspent grant funding.

The municipality determined a minimum level of cash which should ideally bemaintained for the covering of operational costs. The threshold is based on threemonths of the operating budget excluding provision for bad debts and depreciation.This requirement is considered to be a safety net should the municipalityexperience cash flow constraints i.e. if equitable share tranches are delayed fromNational Treasury. At this point in time, ADM does not have sufficient cash in thebank to cover this threshold, and further highlighting ADM’s reliance on grantincome.

The municipality cannot afford to take on any further commitments or specialprogrammes without additional funding being received and any expenditure whichhas not been provided for in the budget as the current cash reserves are notsufficient.

Revenue

manageme

nt –collection

rate

The employee efficiency ratio measures total employee costs to total operating

expenditure. The 16/17 budgeted ratio yields 40%, while the year to date actual ratio

yields 73%. Circular 71 of the MFMA indicates a norm between 25% - 40%,

however the ADM should not exceed 41%.

The mid-year ending 31 December 2016 yields a ratio of 73%.

The liquidity ratio of 1.5:1 indicates that the municipality has cash flow constraints hence the strict

monitoring of the physical cash in the bank has been implemented. This includes the establishment

of a payments committee led by the Municipal Manager to ensure that the cash flow constraints

are managed, as money is being spent at a faster rate than it is being collected. Even though the

municipality is not a cash generating or investment entity, it is prudent to maintain cash reserves

as a contingency. This is indicative of ADM not being able to fund future operations if cash in the

bank is not maintained. The ADM is unable to create reserves without having cash available. In

addition, improved monitoring of operating expenditure i.e. overtime, S&T and essential user re-

imbursement claims is being implemented.

Employee costs remain the largest contributor to operating expenditure. The ratio is

to be monitored to ensure that employee costs are indicative of the level of service

that is to be delivered. This may be indicative of a control weakness.

Overtime is a very costly form of remuneration and needs to be strictly monitored

and should be utilised in departments that provide essential services only.

Employee costs is a constant expense from month to month (fixed) which usually

only varies due to appointments or resignations, while other operating expenditure

varies from month to month depending on demand and procurement processes. No

new appointments to be made and any post that is vacated must be re-assessed for

importance, instead of merely recruiting. If other operating expenditure were to

increase, this ratio would decrease.

Description 2012/1312months

2013/1412months

2014/1512months

2015/1612months

2016/1706months

Remuneration as% of totaloperatingexpenditure

35% 37%40% 42% 73%

The table above indicates a growth rate of between 2% and 3% year on year up to

2015/16 financial year. Efficiency of existing staff needs to be assessed in light of

the growth in the ratio for 2016/17.

Collection rate for the mid - year ending 31 December 2016 is 46% which is below the target of

60%, however there has been an improvement from June 2016 when looking at per month

Employee

Efficiency

Ratio

The employee efficiency ratio measures total employee costs to total operating

expenditure. The 16/17 budgeted ratio yields 40%, while the year to date actual

ratio yields 73%. Circular 71 of the MFMA indicates a norm between 25% - 40%,

however the ADM should not exceed 41%.

The mid-year ending 31 December 2016 yields a ratio of 73%.

Employee costs remain the largest contributor to operating expenditure. The ratio

is to be monitored to ensure that employee costs are indicative of the level of service

that is to be delivered. This may be indicative of a control weakness.

Overtime is a very costly form of remuneration and needs to be strictly monitored

and should be utilised in departments that provide essential services only.

Employee costs is a constant expense from month to month (fixed) which usually

only varies due to appointments or resignations, while other operating expenditure

varies from month to month depending on demand and procurement processes. No

new appointments to be made and any post that is vacated must be re-assessed for

importance, instead of merely recruiting. If other operating expenditure were to

increase, this ratio would decrease.

Description 2012/1312months

2013/1412months

2014/1512months

2015/1612months

2016/1706months

Remuneration as% of totaloperatingexpenditure

35% 37%40% 42% 73%

The table above indicates a growth rate of between 2% and 3% year on year up to

2015/16 financial year. Efficiency of existing staff needs to be assessed in light of

the growth in the ratio for 2016/17.

collection rate. The majority of debt is sitting on the 90 day plus category, 78% thereof being

domestic category. There are areas where meter readings and restrictions cannot take place on a

monthly basis due to ADM officials being chased away by the community, although the interim

charge is being effected in these areas, consumers are not paying at all as they know that there will

be no repercussions to their non-payment.

A large percentage of water losses are incurred by ADM on a monthly basis as consumers are not

using water sparingly especially during these drought-stricken times. Illegal connections remain

a serious challenge for the ADM as revenue is being lost as well as putting strain on the water

reticulation. A strategic intervention to engage with the members of the community at a political

level needs to be embarked upon to improve the issues relating to water losses and the collection

rate.

Debtors

and billing

[Refer to: Age Debtors - DC12_AD_2017_M06]

The age analysis indicates the composition of the ADM’s debt book.

The debtors’ age analysis indicates that 88% of the total debt due is reflected within

the 90+ day’s category. The domestic debtor group constitutes 78% of the total

debt with 36% of the accounts being handed over to the debt collector. This could

indicate that a large number of consumers qualify for indigent status, but have not

approached the municipality for registration. Interest of prime is charged on

accounts that are past 30 days due.

Creditors

ageing

[Refer to: Age Creditors - DC12_AC_2017_M06]

Council is required to pay creditors within the requirements of Section 65(2)(e) of

the MFMA, being within 30 days of receiving the relevant invoice. The majority

of the creditors fall within the current aging. The payments section has

implemented a process to streamline payment processes to ensure that all invoices

are paid within 30 days. 97% of creditors payments were paid within 30 days

during the mid-year ending 31 December 2016. This also creates a negative impact

on the cash flow as suppliers have to be paid with 30 days while consumers are

paying after 90 days.

The DBSA loan constituted R286 million capital and R34 million interest due to DBSA for the

accelerated sanitation project. The interest amount is serviced from VAT savings and the capital

ProjectExpenditure

Externally funded projects spent 43% and Internally projects spent 28%. The amount

unspent for conditional grant for the mid-year ending 31 December 2016 is R184

million and has been illustrated in the table below.

Funds amounting to R376 million and R74 million has been received for MIG and

Water Services Infrastructure Grant (WSIG) respectively. This entails that 81% of the

unspent conditional grants received to date is for MIG while 16% is WSIG. The RBIG

is overspent by R12 million due to commitments being included in the ADMaC

expenditure.

The total budgeted amount for internally funded projects is R15 million distributed

among BTO, Engineering and Community Services. To date R4 million has been

spent which equates to overall expenditure of 28%. The spending on internally funded

projects is linked to cash availability. A review of projects with no expenditure needs

to be done.

portion from the MIG grant. The second last payment was made during December 2016 in line

with the receipt of the MIG grant, being R42 million capital and R2.3 million interest. The loan

was to be fully settled during March 2017, however due to the last tranche of the MIG grant being

received than expected, the loan will be settled during the month of January 2017.

Strict monitoring of the physical cash in the bank has been implemented, including the

establishment of a payments committee led by the Municipal Manager to ensure that the cash flow

constraints are managed, as money is being spent at a faster rate than it is being collected. Even

though the municipality is not a cash generating or investment entity, it is prudent to maintain cash

reserves as a contingency. This is indicative of ADM not being able to fund future operations if

cash in the bank is not maintained. The ADM is unable to create reserves without having cash

available. Improved monitoring of operating expenditure i.e. overtime, S&T and essential user

re-imbursement claims is being implemented.

Half-year Service Delivery Performance

The half year municipality’s service delivery performance is made out of quarter 1 and quarter 2

performance assessment results, which makes the half year performance report.

Section 72(1) (a) of the MFMA states that “The accounting officer of the municipality must by 25

January of each year

a) Assess the performance of the municipality during the first half of the financial year, taking

into consideration;

Capital

Expend

iture

Capital expenditure typically includes vehicles, computer, equipment, desk, chairs,

etc. which are funded by internal contributions. It also includes expenditure on water

and sanitation infrastructure funded by external funds such as MIG.

Capital expenditure reflects underspending for the mid-year ending 31 December

2016. The 2016/17 capital expenditure includes the purchase of two motor vehicles

for the Mayor and the Speaker and the software development costs associated with the

new ADMaC System.

ii. The municipality’s service delivery performance during the first half of the financial

year, and the service delivery targets and performance indicators set in the service delivery

and budget implementation plan”

The Service Delivery and Budget Implementation Plan (SDBIP) is a living document, and as such,

it was reviewed, based on the mid-year performance assessment. The review of the SDBIP resulted

in amendments being proposed for the approval of the Executive Mayor.

The table below indicates the proposed amendments to the 2016/2017 SDBIP targets.

KP INDICATOR

N NO.

PRIORITY

AREA

STRATEGY PROPOSED CHANGES REASON FOR

CHANGING/

JUSTIFICATION

DEPARTMENT KPA

KPI 3 HumanResources

Implementationof theEmploymentEquity Plan

ORIGINALTARGET:

Q30.19 % Increase ofemployees living withdisabilitiesQ40.19 % Increase ofemployees living withdisabilities

Annual target0.75 % Increase ofemployees living withdisabilities employedin accordance with EEP

PROPOSEDTARGET:

Q3N/A

REASON FORCHANGING:

People living withdisabilities sometimes donot want to disclose theirdisability and also, theDepartment has no controlon who applies andtherefore, has no controlover this KPI

CORPORATESERVICES

MTI

Q4N/A

Annual target0.17 % Increase ofemployees living withdisabilities

KP1 7 Water Eradicate waterbacklogs

ORIGINALTARGET:Q31100 Householdsconnected to the watersupply

Q41250 Householdsconnected to the watersupply

Annual target3100 Households withnew water connections

PROPOSEDTARGET:Q35503 Householdsconnected to the watersupply

REASON FORCHANGING:

Not all projects that weresuspended due to the firsttranche transferred by MIGthat was not enough tocover all the projects. Someprojects had to be delayedto the 2nd and 3rd quarter assuch that affected the settargets from Q2 to Q4,hence this revision.

ENGINEERING SDI

Q41045 Householdsconnected to the watersupply

Annual target6909 Households withnew water connections

KPI 11 Water Reduction ofwater losses

ORIGINALTARGET:

Annual target5% reduction of waterlosses within 3specified schemes(Alice, Sutterheim, FortBeaufort)

PROPOSEDTARGET:

Annual target5% reduction of watersupply within 3specified schemes(Alice, Sutterheim, FortBeaufort)

REASON FORCHANGING:

To change only thephrasing of the annualtarget in order for it to readspecifically that 5%reduction in water supply,(as guided by AuditorGeneral)

ENGINEERING SDI

KPI 14 Sanitation Upgrading ofSanitationinfrastructure

ORIGINALTARGET:Q33 final detailed designs

Q4Final design reports

Annual targetDesign reports forsanitation infrastructureupgrade

PROPOSEDTARGET:Q3Reports on EIA processfinalization and MIGregistration

Q4GeotechnicalInvestigations reports

Annual targetDraft detailed designsfor sanitationinfrastructure upgrade

REASON FORCHANGING:

These targets were setbefore the EIA specialistwas appointed as such theduration of the EIAprocesses were underestimated and the specialistindicated that they will nottake less than 6 months dueto standard procedure thathave to be adhered to, andunfortunately all other stepshave to wait for thecompletion of the EIA to beable to be done, hence therevision.

ENGINEERING SDI

NEW (ADDITIONALINDICATOR TOUPGRADING OFSANITATIONINFRASTRUCTURE)

Sanitation Upgrading ofSanitationinfrastructure

PROPOSEINDICATOR:

No. of householdssupplied with new VIPToilets

PROPOSEDTARGET:Q31085 Householdssupplied with new VIPtoilets

Q4N/A

Annual target1085 Householdssupplied with new VIPtoilets

REASON FORCHANGING:

This is new KPI for2016/17 financial year.There were no fundsavailable for it (VIPSanitation projects) duringthe period where targetswere set. However thingshave since changed andfunds have been madeavailable to ADM throughthe new grant WSIG hencethe new target.

ENGINEERING SDI

KPI 16 Fire Services Construct andoperationalizelegally compliantfire stations in thedistrict

ORIGINALTARGET:

Q3Progress onconstruction of 1 firesafety & emergencyfacility

REASON FORCHANGING:

Delays on whether toappoint or not to appointwas the issue in theprojects. After an number ofdiscussions by the affecteddepartments it was thendecided to appoint on a

ENGINEERING SDI

Q41 fire safety &emergency facility 20%constructed inButterworth

Annual target1 fire safety &emergency facility 20%constructed inButterworth

PROPOSEDTARGET:Q3Appointment of thecontractor

Q41 fire safety &emergency facility 20%constructed inButterworth

Annual target1 fire safety &emergency facility 20%constructed inButterworth

reduced scope based on theavailable budget of R 2 000000

KPI 18 WasteManagement

Implementationof the IntegratedWasteManagementPlan

ORIGINALTARGET:

Annual targetPhase 3 of Solid WasteTransfer Stationcompleted inAmahlathi.

PROPOSEDTARGET:

Annual targetEastern regional wastesite operated andmaintained

REASON FORCHANGING:

There was an error on theannual target only. ENGINEERING SDI

KPI 19 Transport Implementationof the IntegratedTransport Plan

ORIGINALTARGET:

Q4Completion ofupgrading of thefacility.

Annual target1 Public TransportFacility upgraded

REASON FORCHANGING:

Delays were experienceddue to the termination of theexisting Service Provider ofthis project. ADM wentthrough a tender process inorder to appoint another SPto complete the work

ENGINEERING SDI

PROPOSEDTARGET:

Q4Progress on upgradingof the facility.

Annual target1 Public TransportFacility upgraded

KPI 25 Ruraldevelopment

Implementationof the NationalPresidential RuralDevelopmentInfrastructureprogram

ORIGINALTARGET:

Q3Progress report on thesupported RuralDevelopment Strategyprograms (through theparticipation in theAgri-Park)

EvidenceSigned report on theparticipation of Agri-Park.

Q4Progress report on thesupported RuralDevelopment Strategyprograms (through the

REASON FORCHANGING:

To correct the wording ofthe target and evidence LHSED LED

participation in theAgri-Park)

EvidenceSigned report on theparticipation of AgricPark

PROPOSEDTARGET:

Q3Progress report on ruraldevelopmentprogramme

EvidenceSigned report on therural developmentprogramme

Q4Progress report on ruraldevelopmentprogramme

EvidenceSigned report on therural developmentprogramme

PROGRESS ON RESOLVING CHALLENGES IDENTIFIED IN THE 2014/2015 AND2015/2016 ANNUAL REPORTS

2014/2015

The Amathole District Municipality received an unqualified audit opinion with emphasis of

matter issues for the 2014/15 financial year. It must be noted that the ADM had fully disclosed

the matters noted under the Emphasis of Matters paragraph. The audit report also contains

findings on a few matters relating to non-compliance with certain laws and regulations and

inadequate internal controls. The matters of non-compliance do not influence the opinion

issued. Once again the municipality received “a clean audit opinion” on the audit of

performance information.

In order for the municipality to achieve a clean audit, it must obtain an unqualified audit

opinion, no items identified within the Emphasis of Matter paragraphs and no findings on non-

compliance with laws and regulations. In addition the municipality should ensure that there

are no significant weaknesses in internal controls.

The Auditor General was of the opinion that Senior Management did not always exercise

adequate oversight responsibility over reporting on pre-determined objectives, compliance and

related internal controls. This was the result of not adequately monitoring the functioning of

internal controls, in year reporting and progress with the implementation of the audit action

plan. As a result non-compliance with the MFMA and material misstatements on the annual

performance report were only identified during the audit process.

To ensure that all audit findings are addressed, an audit action plan was developed which assign

planned responses, responsibilities and timeframes to relevant officials. This is currently being

monitored and reviewed by related HOD’s to ensure that all issues raised by Auditor General

are addressed.

Below is the progress made as at December 2016 on the 2014/15 Audit Action Plan. Out of 50

actions to be undertaken, 8 have not been fully addressed.

2015/2016

The Amathole District Municipality once again received an unqualified audit opinion with

emphasis of matter issues for the 2015/16 financial year. The audit report also contains findings

on a few matters relating to non-compliance with certain laws and regulations and inadequate

internal controls. The matters of non-compliance do not influence the opinion issued.

In order for the municipality to achieve a clean audit, it must obtain an unqualified audit

opinion, no items identified within the Emphasis of Matter paragraphs and no findings on non-

compliance with laws and regulations. In addition the municipality should ensure that there

are no significant weaknesses in internal controls.

Below is a table detailing the findings of non-compliance with laws and regulations and weak

internal controls together with the proposed remedial action.

No. Non-Compliance Issues Remedial Action1. Expenditure Management

Money Owed by the ADM was notalways paid within 30 days, as requiredby section 65(2)(e) of the MunicipalFinance Management Act

Reasonable steps were not taken toprevent irregular, 62(1)(d) of theMunicipal Finance Management Act

A register of invoices received by the ADM isutilized to track invoices within the ADM.Monthly reports are prepared to monitorcompliance with Section 65(2)(e). The ADM hada 88% compliance rate, however due to cash flowconstraints, invoices could not always be paidwithin 30 days of receipt. Invoices could only bepaid once cash had been received.

The ADM has an approved policy for Irregular,fruitless and wasteful and unauthorizedexpenditure which is implemented.

Procedures are in place to prevent, detect andrectify irregular expenditure, hence the immaterialamount of irregular expenditure disclosed in theannual financial statements.

The irregular expenditure disclosed in the annualfinancial statements was identified by the ADM

2. LeadershipSenior management did not alwaysadequately oversee reporting on

Controls and processes will be strengthened tocontinue to prevent and detect instances ofirregular expenditure. Timely reporting of

No. Non-Compliance Issues Remedial Actionpredetermined objectives, complianceand related internal controls. This wasthe result of not adequately monitoringthe functioning of internal controls, in-year reporting and progress with theimplementation of the audit action plan.As a result, non-compliance with theMFMA and material misstatements onthe annual performance report were onlyidentified during the audit process

identified and un-prevented instances of irregularexpenditure and fruitless and wasteful expenditurewill continue to be performed to facilitateinvestigation by Council if required.

Reports on Irregular Expenditure are presented toboth the Audit and Risk Committee and MPACcommittee for consideration and the exercise offurther oversight

Monthly financial dashboards and the AuditAction plan are presented at the EMC and AuditCommittee

Section 71 reports are presented to the MPACcommittee

Timely reporting in all council structures andstrengthening of internal controls

3. Financial and PerformanceManagementThe annual performance reportsubmitted for auditing contained materialmisstatements due to a lack ofdocumented standard operatingprocedures for the recording of actualachievements and inability to producesufficient and appropriate supportingevidence for reported performance.These material misstatements weresubsequently corrected. In addition,compliance with applicable legislationwas not adequately monitored during theyear, which resulted to materialcompliance findings.

For non-compliance issues refer to point oneabove

Creating a register for monitoring theDevelopment of Standard Operating Proceduresfor all SDBIP indicators

4. GovernanceAlthough the internal audit unit and auditcommittee met regularly throughout theyear, they did not identify, report andrecommend improvements todeficiencies to key controls necessary forcredible reporting on predeterminedobjectives to the accounting officerduring the year under review.Consequently, material misstatements in

Management are to use internal audit reports as atool to assist in improving control weaknesses andbecoming audit ready.

Action plans are developed by management toresolve findings by the Internal Audit unit.

The monitoring and presenting of these plans tothe EMC and Audit and Risk Committees to assist

No. Non-Compliance Issues Remedial Actionthe annual performance report as well asinstances of non-compliance withlegislation were only identified duringthe audit process

in adequate and timely implementation willcontinue and be strengthened.

Constant review of performance at all levels

Review of Performance Information by Head ofDepartments

(ii) DRAFT MID – YEAR BUDGET AND PERFORMANCE ASSESSMENT OF

ASPIRE (REFER ANNEXURE C)

PURPOSE

In terms of the section 88 (1) of the MFMA the accounting officer of the municipal entity mustby 20 January of each year assess the performance of the entity during the first half of thefinancial year, taking into account:

management accounts for the first half of the financial year

targets set in the service delivery, business plan other agreements with the entity’s parent municipality the entity’s annual report

And submit a report on such assessment to:

the board of directors of the entity; and the parent municipality of the entity.

The purpose of this report is to present ASPIRE’s mid-year performance report for the periodJuly 2016 to December 2016.

LEGAL/STATUTORY REQUIREMENTS

- The Constitution of the Republic of the South Africa Act 108 of 1996

- The Local Government Municipal Structures Act 117 of 1998

- The Municipal Finance Management Act 56 of 2003

STRATEGIC DOCUMENTS

- Amathole Regional Economic Development Strategy 2007-2027

- ASPIRE Strategy 2013-2018

- ASPIRE Performance Management System

- ADM IDP 2012-2017

BACKGROUND

ASPIRE continued with the implementation of its strategy for the period under review. Thenew strategic plan is aimed at stimulating the rural economy through, namely agriculture,heritage & tourism and small towns’ regeneration. These three pillars form the core businessof ASPIRE, and it is initiatives in these three areas that are implemented in the various corridorswithin the Amathole region. The focus of the strategy is on empowerment of women, youthand people with disabilities to ensure that they play a role in the economy of the region.

Whilst work continued at Aspire in keeping the organisations operating, limited work wasachieved on the core business of Aspire due to a lack of funding. The challenges facing theagency have resulted in the agency achieving only 55% of its quarterly targets. Thesechallenges include the constrained budget, capacity at Executive Management level due to theabsence of a CEO, and a lack of approved funding from external funders for the implementationof projects in the core business.

The challenges experienced can be attributed to the lack of a permanent CEO since December2014. Between the two period ASPIRE did not have a permanent CEO, approximately fourpeople have acted in CEO’s position. This direly affected the implementation of a strategy andcoherent running of an organization. This was also a period in which ASPIRE had four peopleacting in a CFO position. The absence of the two legislated positions made funding impossibleas the situation rendered the organization not worthy to invest in. A permanent CFO has sincebeen appointed as from October 2016 for a period of a year.

Adding to these challenges, the Company Secretary (CS) has resigned as from the 31 December2016, making way for the appointment of a firm to provide services of a company secretary.The services are to be provided as and when needed.

Similarly three supply chain management committees have been established to assist theorganization to implement its supply chain management policy and MFMA and other legalprescripts. The committees are:

Bid specifications

Bid Evaluation

Bid Adjudication

Training was scheduled for all committee members, however, time constraints have onlyallowed executive committee members and committee chairpersons to receive trainingconducted by Amathole District Municipality. The Provincial Treasury was requested toprovide this training given financial challenges. However, the three committees arefunctioning, though with challenges. A supply chain specialist has been availed by theAmathole District Municipality as and when needed.

There was stability at the Board level, following appointment of 9 permanent board membersto serve a period of three years. However, 2 board members (Ms. P. Loyilane) has sinceresigned on 26 June 2016, and (Mr. Metuse) from 28 July 2016. Of the 9 board members, 3members also served on the Interim Board of 5 members.

Progress over the past 6 months are provided in line with ASPIRE’s strategic goals, namely:

1. Enhance Governance, Board Support, Compliance and Legal Services

2. Create an Efficient Corporate Services Environment

3. Ensure Compliance with Finance and Supply Chain Policies

4. Effective Project Management and Implementation

1. ENHANCE GOVERNANCE, BOARD SUPPORT, COMPLIANCE AND LEGALSERVICES

OBJECTIVE

Being a good and effective service organisation

ASPIRE has 6 projects that fall under this strategic objective, namely:

Governance Documents and Effectiveness of the Board

Review Board charters, board committee charters or TOR and Board policies

Incorporate Aspire in terms of the Companies Act 2008

Coordinate functioning of Board oversight structures

Ensure compliance with key legislation and board committee charters

A total of 3 targets from 6 relating to the above projects were achieved by mid-year (50%).Those that were not achieved were due to issues beyond the control of the organisation andcapacity constraints at executive management level due to the absence of a permanent CEO.

2. CREATE AN EFFICIENT CORPORATE SERVICES ENVIRONMENT

OBJECTIVE

To provide seamless support to ASPIRE business processes, based on best practices andtechnology to serve customers

ASPIRE has 5 projects that speak to this strategic objective, namely: Implementation of the Employment Equity Plan

Implementation of the Health and Safety Policy

Implementation of the Workplace Skills Plan

Conduct and annual review and development of HR policies

Coordinate performance reporting, monitoring and evaluation

A total of 7 targets of 15 relating to the above projects were achieved (46%). The targets notachieved were due to capacity constraints and the limited budget which limited theimplementation of the projects, such as training and design of the annual report.

3. ENSURE COMPLIANCE WITH FINANCE AND SUPPLY CHAIN POLICIES

OBJECTIVE

To ensure sound and sustainable management of Aspire finances

ASPIRE has 10 projects under this strategic objective: Submission of S87 reports to ADM

Improvement of Aspire’s working capital

Implement reviewed SCM systems and procedures to address issues causing deviations

Annual Financial Statements

Conduct an Annual Review and Development of new Finance Policies

Monitoring and reporting on contractual commitments and performance of serviceproviders

Implementation of the Internal Audit Management action plans

Implementation of the Risk Master Plan

Implementation of Standard Chart of Accounts

Asset Management and Tracking

A total of 15 targets of 19 relating to the above projects were achieved (78%). The targets notachieved were due to capacity constraints and circumstances outside the scope of Aspire whichlimited the implementation of the projects.

4. EFFECTIVE PROJECT MANAGEMENT AND IMPLEMENTATION

OBJECTIVE

Economically empowered farmers and communities unlock agricultural assets in theirlocalities to ensure a thriving commercial agricultural sector within Amathole

ASPIRE has 2 projects that speak to this objective, namely:

Business plans for honey and aloe processing projects

Fundraising for Agriculture projects

A total of 1 target of 3 relating to the above projects were achieved (33%). The targets notachieved were due to a lack of funding which limited the implementation of the projects.

OBJECTIVE

Increase the Tourism Sector contribution to the GDP of Amathole using the rich culture andheritage of ADM


Operationalisation of Emthonjeni Artists Retreat

Fundraising for Culture, Heritage and Tourism projects

A total of 1 target of 2 relating to the above projects were achieved (50%). The target notachieved was due to a lack of funding which limited the implementation of the projects andproperty not transferred to a local municipality.

OBJECTIVE

Enhance identified small towns within Amathole to enable them to support sustainableeconomic development initiatives.


Alice Transport Hub

Fundraising for upgrading of small towns

A total of 0 targets of 2 relating to the above projects were achieved (0%). The targets notachieved were due to a lack of funding which limited the implementation of the projects. AliceTransport Hub was not achieved because of not finding a suitable contractor following theprocurement process started during 205/2016 financial year.

CONCLUSION

ASPIRE has 49 approved quarter 2 targets for the current financial year, of which 27 wereachieved (55%).

OPERATIONS REPORT – Progress on projects

1. INTRODUCTION

Performance Report of the Operations Unit of ASPIRE is herein presented. The report coversthe period from 01 July to 31 December 2016. The report is structured according to the AnnualPerformance Plan of ASPIRE, with details given on the deliverables envisaged for theFinancial Year 2016/17.Informing 2016/2017 financial year was the approved ASPIRE Strategy.

The report is structured in the following manner:

Progress against the Annual Performance Plan (APP);

Key Highlights for Quarters 1 and 2;

Current Status of Projects;

Challenges currently experienced by the Operations Unit;

Status of Legacy Projects

Projects Submitted for Funding for FY 2016/17

Each deliverable is reported on under the strategic targets, namely:

Agriculture and Rural Development;

Heritage and Tourism;

Economic Infrastructure

Small Town Regeneration;

Rehabilitation of Natural Resources.

The identified areas and projects to be pursued are as follows:-

Projects Requested BudgetAlice Park R4 millionMama Annie Silinga Memorial Garden R3 MillionEmthonjeni Artist Retreat R4 millionTotal Budget requested R11 MillionProjects Allocated BudgetKeiskammahoek Blueberries R14 000 000Ngangegqili Livestock Improvement R 0Hamburg Fish Farm R 500 000Development of Aloe Processing Business Plan R 500 000Fundraising for agricultural projects R 0

Total Budget R15 000 000

2. KEY HIGHLIGHTS FOR QUARTERS 1 and 2

The following are the most notable highlights for ASPIRE Operations for Quarter 2:

ASPIRE has successfully formulated the 2016/2017 Annual Performance Plan

Submission of proposals for funding to De Beers, Anglo American and AfricanRainbow Minerals

Revision of Emthonjeni Artist Retreat Operational Plan

Development of a list of culture, heritage and tourism projects for 2016/2017 financialyear

Extension of Alice Park to incorporate Second Phase which deals with heritage at therequest of local stakeholders.

PROGRAM

SUBPROGRA

M

PROJECTNAME

MUNICIPALITY

BUDGET

EXPENDITURE

TODATE

PROJECT STATUS CHALLENGES REMEDIALACTION

PORTFOILIO OFEVIDEN

CE

RURALDEVELOPMENT &&AGRICULTURE

Development ofAmatholeHoney andAloeProcessingBusinessPlan

Ngqushwa andNkonkobe

0.00 R 0.00 1. Site has beenidentified at Tyefu.

2. A proposal has beenpresented by CSIRto ASPIRE.

3. NAMC to give anup-date.

ASPIRE’s lack ofbudget is a hindranceto stakeholdermanagement ormobilization thereof.

CSIR’scontinuousreminders.

Minutesand e-mails.

Fundraising foragricultureprojects

Development offundingproposals

Amathole R 0.00 R 0.00 1. Discussions between

ASPIRE and

DRDLR are on-

going for the release

of R14 million.

2. A request for

previous invoices

has been submitted

to ATS and some

have been

submitted.

Department’savailability.

Continuousengagementwith thedepartments

Proposal

3. A meeting between

ASPIRE, DRDLR

and DTI will sit at

the earliest

convenience of DTI.

4. Farmer training

proposal has been

submitted to NSF.

3. CURRENT STATUS OF PROJECTS.

PROGRAM

SUBPROGRAM

PROJECTNAME

MUNICIPALITY

BUDGET EXPENDITURE TO

DATE

PROJECTSTATUS

CHALLENGES

REMEDIAL

ACTION

PORTFOLIO OFEVIDEN

CE

AliceRegeneration

AlicePedestrianBridge

Nkonkobe R 4 305000.00

R3 732 956.00

Erection ofSteel Bridgehas beencomplete.

Contractorcommencedwithformworkandconcrete.

Timedelays dueto collapse.

Completion ofotheroutstanding worksto bedone.

Photographs,Minutes ofSiteMeetings

Alice CBDUpgrade

Nkonkobe R17 237 000.00

R 9 214906.56

ContractPeriod: 19Months

Insurance

Replacement Insurance/

Photographs,Minutes ofSiteMeetings,Payment

PublicLiabilityInsurancehas beenprovided bycontractor.Proof ofWorkman’sCompensationInsurancehas beenprovided byContractor.Letter ofGoodStandingfrom Deptof Labourhas beenprovided bythecontractor.

Sub-Contractors

No morethan 25% of

Certificates

the value ofthe contractwas to besubcontracted. Thefollowingwork wassubcontracted:-

Concretework(premixandoverlay)

Electrical

Landscaping

PaymentCertificates

55% of theconstructionproject

value hasbeen paidout to thecontractor.

Engineers

Prices forHawkerStalls to besubmitted toQuantitySurveyor

Environmental

TereccoEnvironmental has beenappointed astheEnvironmentalConsultantsfor theproject.

SocialFacilitation

RJN are thesocialfacilitatorsfor theproject.

A prayerceremonytook placeon 31October2015, whichwas aprerequisitefor thedemolitionof thememorialfor fallenheroes.There wereno negativeresponses.A newmemorial tobe

registeredby Aspirewith theHeritageCouncil.

Health andSafety

SafeWorkingPracticehave beenappointed asthe Healthand SafetyConsultantsfor theproject. SiteIncidences -Nil.

VariationOrders

A VariationOrder wassubmittedand

approved,however ithad nofinancialimplications.

Work isprogressingsteadily onsite as perproject plan.

Next Step

RenovationofMunicipalOfficeswhich willconsist ofpainting andreplacementof Guttersand FaciaBoards.

AliceTransport Hub

Nkonkobe R17 939 189.

46

3 098 753.00 1. Procurementprocesswascompleted.

2. Nosuitablecontractorwas foundthroughtheprocess.Funds stillwithTreasury.Adiscussionhasalreadystarted toreceivefunds andcontinuewith theproject.

Procurement ofContractor

Speed Upprocurementprocess.

Bid SpecMinutes

PROGRAM SUB PROGRAM PROJECT NAME MUNICIPALITY BUDGET EXPENDITURETO DATE

PROJECTSTATUS

CHALLENGES REMEDIALACTION

PORTFOLIOOF

EVIDENCE

SpecialProjects

Clearing ofInvasive AlienPlants

Natural ResourceManagement

Mnquma and Mbhashe R8428.982.00

R0 1.Vegetabl

e bedspreparedin DuncanVillage andZiphunzanasites.

2. 5300 m3of dirtexcavatedinZiphunzanaandZwelitshaward 41.

3. Soilcultivationdone in

Procurementprocess alreadyundertaken toappointcontractors.

1. List ofbeneficiariesemployed inthe NRMprojects.

2. Contractoragreements

3. Beneficiaryemploymentagreements.

4. Time sheets.

5. Quotationpacks.

6. Quarterlyreports.

Zwelitshaward 25.

4. 15 000pamphletshave beendevelopedfor theeducationandawarenesscampaign5. 10 NoDumpingsigns wereerected inall 5 sites.

6. 5 steelcontainersdeliveredin 5 sites toserve asshelter,office, andstorage.

7. R942957.93 wasspent

7. Inspectionreports.

8. Expenditurereport.

8. R2 465187.00receivedfrom theDEA.

Waste Management EC - Adopt a Spot BCMM Due to projectfundingexhausted notprojectimplementationwas realized.2016/2017funding requestwas submitted tothe DEA.

Supply ChainManagementPolicy of thecompany hasbeen followedto procureservices of thequalifiedArchitects butthe serviceshave not beensecured and assuchcorrespondencewould bewritten toappointdirectly aqualifiedserviceprovider.

Reviewindividualtenderssubmitted peradvertisementandrecommendappointment.

4. CHALLENGES CURRENTLY EXPERIENCED BY OPERATIONS.

The Operations unit continues to face challenges due to insufficient funding from the operations

budget.

Projects that are ongoing are those that have been externally funded, while there is no budget to

start new projects. During 2015/2016 financial year more than 15 proposals were submitted for

funding to the following organizations and departments:

Department of Arts and Culture

Department of Sport, Recreation, Arts and Culture

Department of Economic Development, Environmental Affairs and Tourism

National Lotteries Commission

None of the submitted projects received any funding, despite satisfying all the funding

requirements. The situation led to lack of projects for 2016/2017 financial year, dictating that the

financial year is to be spent on more fundraising and stakeholder mobilization.

At the end of 2015/2016 Financial Year, Programme Manager: Small Towns resigned. This

impacted on the implementation of projects for 2016/2017 financial year. Largely due to

ASPIRE’s inability to retain competent personnel because of the following:

Instability and job security

Prevailing financial position of the economic agency

Resignations continued unabated during the first two quarters of 2016/2017 financial year.

Towards the end of Quarter 2 another programme manager, responsible for Agriculture and Rural

Development resigned because of better offers elsewhere. The resignation of any employee renders

the organization in a precarious situation, considering training and empowerment of such an

employee.

5. STATUS OF LEGACY PROJECTS

ASPIRE has been implementing a range of other legacy projects, most of them in the handover

stage and some of them without budget.

5.1 Hamburg CBD Regeneration

ASPIRE developed a number of buildings as part of Hamburg Regeneration Strategy, though not

utilized by ASPIRE, the organization continued to physically protect them. This continued while

the buildings were partly used by another organization. For example, the Music Academy, Arts

Centre that were used by Keiskamma Trust. Two security personnel since 2012 were hired and

paid for by ASPIRE. When funds dried the two officers were informed and told that their services

were no longer needed. The buildings still remain not transferred.

A discussion between ASPIRE and Ngqushwa Municipality in 2016 resolved that ASPIRE should

develop a comprehensive report, indicating the background to the buildings, intention, budget

etc.in order to assist the municipality to take an informed decision.

6. PROJECTS SUBMITTED FOR FUNDING FOR THE 2016/17 FINANCIAL YEAR

The Blueberries project has funds approved by the Department of Trade & Industry (DTI) and the

Department of Rural Development respectively and ASPIRE is continuing to follow up on the

status of such funds:

Blueberries Project (R14 million) – Approved and withheld due an outstanding process

between Rural Development and the DTI.

National Skills Fund (R7 075 406.80) – Application for training of existing agricultural

entities submitted, feedback pending.

Alice Park

Emthonjeni Artist Retreat

Mama Annie Silinga Memorial Garden

7. CONCLUSION

The massive resignations the organization is experiencing are other negativity the organization

continues to receive.

Non-availability of funds continues to impact on the implementation of identified projects,

especially in projects where municipalities and communities were already informed about the start

of such. The existing stability of ASPIRE is likely to cause a negative effect especially the

consistent newspaper articles about administration and status of funds. No funder would align itself

with an ailing and bankrupt organization.

While a process to appoint a permanent CEO on a five contract bases is started, it is believed that

some form of stability would start to influence how the organization consolidates its space in the

economic development and environmental sustainability. Coupled by the appointment of CFO,

ASPIRE should be able to move forward without further hindrances.

QUARTER 2: FINANCE REPORT

TABLE OF CONTENTS

Item Heading Page

1 Revenue by Source 25-26

2 Expenditure 27-33

3 Statement of Financial Performance – December 2016 34-25

4 Statement of Financial Position – December 2016 35-36

5 Cash-flow Statement – December 2016 37

6 Cash and Cash Equivalents – December 2016 38

7 Report on SCM Implementation 38-39

8 MSCOA & SAP Roll-out 39

9 Conclusion 39

REVENUE & EXPENDITURE

1. REVENUE BY SOURCE

The table below depicts management accounts as at 31 December 2016 in line with the budget as

approved by the Board. This report further attempts to provide detailed explanations on variances

between the approved budget and actual collections as at mid-year.

Budgeted revenue for the entity comprises the following categories: -

ADM Funding

Third Party Grants

Sundry Income including Project Implementation Fees

DESCRIPTION

APPROVEDBUDGET2016/17

Q2 Pro - RataBudget

December 2016

Q2 ActualRevenue/Exp. -31 DEC 2016 VARIANCE %Variances

INCOME - ADM Funding 17,500,629 8,750,315 7,821,636 928,679 10.61Roll over from ADM funding - - - - - IDC Grant - - - - - Third Party Grant - Special Projects 25,743,909 12,871,955 3,335,194 9,536,761 74.09 - Third Party Grant - Rural Development 5,000,000 2,500,000 - 2,500,000 100.00 - Third Party Grant - Heritage, Culture and Tourism 5,000,000 2,500,000 - 2,500,000 100.00 - Third Party Grant - Small Towns Regeneration 67,000,000 33,500,000 - 33,500,000 100.00Roll over from DEA projects 750,000 375,000 - 375,000 100.00NDPG Capital Grant 11,000,000 5,500,000 239,484 5,260,516 95.65NDPG Rollover Amount 5,600,000 2,800,000 - 2,800,000 100.00 - To Fundraise - - - - - - NDPG Technical Assistance - - - - -EA Operations - - - - -Roll over from EA operation Bdget 30,000 15,000 - 15,000 100.00 - Sundry Income - - 68,335 -68,335 No Result - Implementing fees 2,500,000 1,250,000 - 1,250,000 100.00TOTAL INCOME 140,124,538 70,062,269 11,464,649 58,597,620 83.64

ADM FUNDING

Whilst the total approved budget by the board equals R17.5 million, ADM only approved a budget

totalling R12.5 million.

Collections on this revenue category depict an under collection of 10.6% (R928 thousand). As

indicated in the paragraph above, transfers that are effected by ADM are in line with the R12.5

million budget which is contrary to the budget as approved by the Board totalling R17,5 million.

The continued financial sustainability of ASPIRE is at risk if ADM does not adjust this budget

upwards during their mid-year adjustment as the current appropriated funds will not even be

sufficient to cater for ASPIRE’s budgeted payroll costs (R13,1 million).

THIRD PARTY GRANT

The total budget approved for third party grants totals R120,1 million. Most of the budgeted grantsto be received were brought into the budget on the proviso that business plans submitted to thevarious departments for funding would be approved resulting in funds flowing over to ASPIRE.However these did not materialize. Such funding submissions were made to the followingpotential funders:-

Wholesale and Retail SETA

National Skills Fund – Rural Development

National Lottery (Funding Proposal submitted was subsequently declined)

Sports, Recreation, Arts and Culture (Still awaiting a response)

Department of Economic Development, Environment and Tourism (Funding Proposal was

subsequently declined)

Current projects that ASPIRE is busy implementing are those that were received in the previousfinancial year and were thus brought forward to the current financial year as Unspent ConditionalGrants; viz:

1. Adopt a Spot

2. Natural Resources Management

3. BCMM Waste Management

Collections on this category of revenue depict an under-collection of 74% (R9, 5 million) withactual expenditure incurred (transfers from the respective grant accounts) on these grants totalingR3, 3 million as at 31 December. It must also be mentioned that during the budgeting periodASPIRE anticipated that additional funding would have been transferred from the departments forwhich these projects are implemented. However, this also did not materialize.

Also, included in the R120, 1 million for third party grants is R16, 6 million in lieu of NDPGfunds. However, ASPIRE financial records as at 01 July 2016 depict only available funds forNDPG totaling R10, 4 million.Collections on this category of revenue (NDPG) depict an under collection of 96% (R5, 2 million)as at mid-year. This was in lieu of revenue recognition on expenditure incurred during August. Inline with national treasury requirements, an application for the roll-over of these funds wassubmitted to national treasury but unfortunately rejected. These funds were thus returned back tothe national treasury during November.

SUNDRY INCOME AND PROJECT IMPLEMENTATION FEES

With the exception of sundry revenue totaling R68 thousand, no further revenue has been receivedfor project implementation fees.

2. EXPENDITURE

The table below provides a detailed analysis of budgeted expenditure per category as well as percost centre/vote. The following votes are included in the entity’s budget: -

Governance/Legal/Compliance

CEO and Strategic Services

Operations

Corporate Services

Finance & SCM

As at mid-year, the entity has under-spent the approved budget by 84% (R59,2 million of the pro-rata budget). Significant under-expenditure has been incurred in the following cost centre’s/votes.

o Governance/Legal/Compliance - 70% (R718 thousand)

o CEO & Strategic Services – 100% (R78 thousand)

o Operations Department – 95% (R57,3 million)

2.1 GOVERNANCE/LEGAL/COMPLIANCE

DESCRIPTION


Q2 Pro - RataBudget

December 2016


EXPENDITUREGOVERNANCE/LEGAL/COMPLIANCE 2,052,500 1,026,250 307,642 718,608 70.02

CEO & STRATEGIC SERVICES 157,000 78,500 - 78,500 100.00

OPERATIONS DEPARTMENT 120,513,909 60,256,955 2,947,840 57,309,115 95.11

CORPORATE SERVICES 16,011,129 8,005,564 6,756,296 1,249,268 15.61- -

FINANCE AND SCM 1,390,000 695,000 820,807 -125,807 -18.10

TOTAL EXPENDITURE 140,124,538 70,062,269 10,832,585 59,229,684 84.54

DESCRIPTION


Q2 Pro - RataBudget

December 2016


EXPENDITUREGOVERNANCE/LEGAL/COMPLIANCE 2,052,500 1,026,250 307,642 718,608 70.02 - Board Expenses 652,500 326,250 268,331 57,919 17.75 - Legal Fees & Secretarial Support 1,230,000 615,000 39,311 575,689 93.61 - Travelling and Accommodation 120,000 60,000 - 60,000 100.00 - Refreshments / Catering - Board activities 30,000 15,000 - 15,000 100.00 - Board Evaluation - - - - - - Board Events/Training - - - - - - Printing and Stationery 20,000 10,000 - 10,000 100.00

Included as major items in the budget for this vote are board expenses as well as legal fees andsecretariat support. As at mid-year, board expenditure has been under-spent by 18% (R57thousand). It should however be emphasized that this does not include board fees claimed inDecember for the ad-hoc meetings held. Continuing to hold such ad-hoc meetings will likely resultin over-expenditure in budgeted board fees.

Legal and secretariat support was also under-spent by 93% (R575 thousand) as at mid-year. Theapproved budget in this category was compiled with the anticipation that the company secretarycontract was not going to be extended to 31 December. Necessary adjustments will thus befactored in the mid-year adjustments budget.

2.2 CEO & STRATEGIC SERVICES

There was no expenditure incurred under this vote as at mid-year. Costs associated with the ActingCEO were debited under the operations budget.

DESCRIPTION


Q2 Pro - RataBudget

December 2016


EXPENDITURECEO & STRATEGIC SERVICES 157,000 78,500 - 78,500 100.00 - Travelling and Accommodation 150,000 75,000 - 75,000 100.00 - Refreshments / Catering 5,000 2,500 - 2,500 100.00 - Printing and Stationery 2,000 1,000 - 1,000 100.00

2.3 OPERATIONS DEPARTMENT

Included as major items in the budget for this vote is projects expenditure. As explained under therevenue component, most of the expenditure budgeted on this component was in anticipation ofreceiving grants from the various departments. This however did not materialize. As at mid-year,projects expenditure has been under-spent by 95% (R57,1 million pro-rata expenditure). Currentexpenditure realized was in lieu of Adopt a spot; Natural Resources Management; NDPG grant aswell as BCMM grant (Funds transferred to finance operations).

The proposed adjustments budget as at mid-year has thus adjusted downwards both revenue andexpenditure on this category in line with what will realistically be realized by ASPIRE.

DESCRIPTION


Q2 Pro - RataBudget

December 2016


EXPENDITUREOPERATIONS DEPARTMENT 120,513,909 60,256,955 2,947,840 57,309,115 95.11 - Direct Programs (Projects) 120,123,909 60,061,955 2,891,537 57,170,418 95.19 - Project Management Training 120,000 60,000 - 60,000 100.00 - Travelling and Accommodation 250,000 125,000 56,303 68,697 54.96 - Printing and Stationery 20,000 10,000 10,000 100.00

2.4 CORPORATE SERVICES

PERSONNEL COSTS

As at mid-year, personnel costs have been underspent by 16% (R1,2 million pro-rata budget). Thisis as a result of resignations as well as budgeted vacant positions that were not filed as at mid-year.

Necessary adjustments will also be processed as part of the mid-year adjustments budget.

DESCRIPTION


Q2 Pro - RataBudget

December 2016


EXPENDITURECORPORATE SERVICES 16,011,129 8,005,564 6,756,296 1,249,268 15.61 - Staffing (Cost to Company) 13,167,949 6,583,975 5,804,454 779,521 11.84 - Levies (Seta) 131,679 65,840 - 65,840 100.00 - Recruitment 50,000 25,000 143,000 (118,000) -472.00

- Staff Development and Training 100,000 50,000 - 50,000 100.00

- Staff Wellness & Gifts 50,000 25,000 16,578 8,422 33.69 - Rental/Rates - Offices 1,122,000 561,000 445,962 115,038 20.51 - Rental - other - - 6,665 (6,665) No Result - Rental - Plants, Water, Hygiene Tools 6,000 3,000 3,382 -382 -12.73 - Photocopier Rental 65,000 32,500 16,988 15,512 47.73 - Rental of Equipment (alarm) 22,000 11,000 - 11,000 100.00 - Computer Equipment (new) 200,000 100,000 - 100,000 100.00 - Computer Software (new) 100,000 50,000 7,581 42,419 84.84 - Electricity & Water 35,000 17,500 - 17,500 100.00 - Security - - 2,267 (2,267) No Result - Stores and Materials 40,000 20,000 3,184 16,816 84.08 - Printing, Stationery and Consumables 175,000 87,500 37,061 50,439 57.64 - Annual Report 150,000 75,000 1,950 73,050 97.40 - Website Maintenance & Usage 50,000 25,000 - 25,000 100.00 - Internet 30,000 15,000 - 15,000 100.00 - IT Governance and Support 40,000 20,000 31,871 (11,871) -59.36 - Maintenance- Computers 15,000 7,500 877 6,623 88.31 - Telephone 250,000 125,000 157,521 -32,521 -26.02 - Postage/Courier 6,500 3,250 258 2,992 92.06 - Repairs and Maintenance - Office & Furniture 5,000 2,500 1,245 1,255 50.20 - Subscriptions - - 13,374 (13,374) No Result - Insurance 200,000 100,000 62,078 37,922 37.92

OFFICE RENTAL/RENTAL OF OTHER EQUIPMENT

This category was underspent by 21% (R115 thousand pro-rata expenditure) as at mid-year.Considering that the rental agreement with the current landlord has been revised and extended bya further twelve months period at a reduced rental, adjustments to the approved budget will alsobe factored on the mid-year adjustments budget.

Rental of other equipment will also be properly aligned during the mid-year adjustments budgetprocess.

TELEPHONE

Telephone costs continue to be the major cost driver on administrative expenditure. As at mid-year, this category was over-spent by 26% (R32 thousand rands, pro-rata expenditure). Allexisting cell-phone contracts were terminated as at 31 December with new contracts entered intounder the name of each staff member. This method is expected to yield savings on telephone costsmoving forward.

Also, a new contract for a PABX has been entered into with the anticipation that it will provide abudget monitoring and maintenance module so as to curtail escalating costs for telephone.

2.5 FINANCE AND SCM

AUDIT FEES

Audit fees in lieu of the audit by auditor general have been over-spent by 48% (R190 thousandpro-rata expenditure) as at mid-year. Whilst he audit for the 2015/16 financial year was completedby November, however the final billing has not as yet been finalized by the auditor general.

DESCRIPTION


Q2 Pro - RataBudget

December 2016


EXPENDITUREFINANCE AND SCM 1,390,000 695,000 820,807 -125,807 -18.10 - Audit Fees 800,000 400,000 590,109 -190,109 -47.53 - Accounting Fees 150,000 75,000 114,589 (39,589) -52.79 - Bank Charges 35,000 17,500 18,434 -934 -5.34 - Depreciation & Impairment 385,000 192,500 84,755 107,745 55.97 - Travelling and Accommodation 20,000 10,000 - 10,000 100.00 - Advertising 3,774 No Result - General Expenses - - 9,146 -9,146 No Result

DEPRECIATION

As at mid-year, depreciation expense is under-spent by 55% (R107 thousand pro-rata expenditure).Most of the entity’s assets have fully been depreciated and due to cash-flow constraints there areno funds to replace them.

3. STATEMENT OF FINANCIAL PERFORMANCE – DECEMBER 2016

Amathole Economic Development Agency (SOC) Limited(Registration number 2005/030812/07)Trading as ASPIREAnnual Financial Statements for the period ended 31 December 2016

Statement of Financial Performance as at 31 DECEMBER 2016DEC 2016 2016

AUDITEDNote(s) R R

Revenue

Revenue from exchange transactionsInterest Received 67,335 57,651Other Income 1,000 347,129

Total Revenue from Exchange Transactions 68,335 404,780

Reveune from non-exchange transactionsGovernment grants and subsidies 7,821,636 18,558,192NDPG Capital grant 239,484 10,256,759Other grant income 3,335,195 7,354,381Services in kind - 959,939

Total Revenue from Non-Exchange Transactions 11,396,315 37,129,271

Total Revenue 11,464,651 37,534,051

Expenditure

Contracted expenses (239,484) (10,667,968)Depreciaton (84,755) (183,898)Employee related costs (5,804,454) (14,989,161)Finance costs (8) (3,446)General expenses (1,577,595) (3,715,668)Impairment costs - (403,229)Lease rentals (472,998) (866,950)Project expenditure (2,652,052) (6,124,741)Repairs and maintenance (1,245) (13,635)

Total expenditure (10,832,590) (36,968,696)

Operating surplus 632,061 565,355Gain on disposal of property, plant and equipment - 2,681Surplus before taxation 632,061 568,036Taxation - 191,920

Surplus for the period 632,061 376,116

4. STATEMENT OF FINANCIAL POSITION – DECEMBER 2016

Amathole Economic Development Agency (SOC) Limited(Registration number 2005/030812/07)Trading as ASPIREAnnual Financial Statements for the period ended 31 December 2016

Statement of Financial Position as at 31 DECEMBER 2016DEC 2016 2016

AUDITEDNote(s) R R

AssetsCurrent AssetsCash and cash equivalents 5,277,619 16,310,576Receivables from non-exchange transactions 116,472 149,267VAT receivable 402,094 184,162Current Tax recievable 99,700 99,700

5,895,885 16,743,705Non-Current AssetsProperty, plant and equipment 284,984 357,981Intangible assets 4,823 10,133

289,807 368,114

Total Assets 6,185,692 17,111,819

Liabilities

Current LiabilitiesPayables from exchange transactions 1,197,407 1,394,351Unspent conditional grants 3,118,871 14,479,760Operating lease liability 21,238 21,238

4,337,516 15,895,349

Non-Current LiabilitiesOperating lease liability - -

Total Liabilities - -

Net Assets 1,848,177 1,216,470

Contributed capital 1,000 1,000Accumulated surplus 1,847,177 1,215,470Total Net Assets 1,848,177 1,216,470

5. CASH-FLOW STATEMENT – DECEMBER 2016

Amathole Economic Development Agency (SOC) Limited(Registration number 2005/030812/30)Trading as ASPIREAnnual Financial Statements for the year ended 30 June 2016

Cash Flow Statement

Note(s)DEC 2016 R

2016 R

Cash flows from operating activities

Reciepts

Grant revenue recognition 3,607,474 18,453,939Grants (3,538,252) 19,445,223Interest & Other Income 68,335 57,651

137,557 37,956,813

PaymentsEmployee Costs (5,804,454) (14,211,046)Suppliers (5,366,052) (23,290,643)NDPG refund to ADM - -Finance costs (8) (3,446)Taxes and surpluses - 553,751

(11,170,513) (36,951,384)Net cash flows/outflows from operating activities (11,032,956) 1,005,429

Cash flows from investing activities

Purchase of property, plant and equipment - (16,702)Proceeds from sale of property, plant and equipment 7,325Purchase of other intangible assets - -Non cash acquisition of Hamburg assets - (124,695)

Net cash flows from investing activities - (134,072)

Net increase/(decrease) in cash and cash equivalents (11,032,957) 871,357Cash and cash equivalents at the beginning of the year 16,310,599 15,439,242

Cash and cash equivalents at the end of the year 5,277,642 16,310,599

6. CASH AND CASH EQUIVALENTS – DECEMBER 2016

Included in cash and cash equivalents are conditional grants call accounts totalling to R3.1 millionas at mid-year. The rest of the cash (R2.2 million) being available to finance the on-goingoperations of ASPIRE. With the next draw-down from ADM only anticipated in March, thisplaces ASPIRE’s continued financial sustainability at a risk as it will result in the inability tofinance the short-term financial obligations.

7. REPORT ON SCM IMPLEMENTATION

In line with the requirements of the municipal supply chain management regulations, the outgoingActing C.E.O. had appointed committees in line with regulations 27, 28 and 29 (Bid SpecificationCommittee; Bid Evaluation Committee and Bid Adjudication Committees).

The ADM SCM unit continues to provide support to ASPIRE as we do not have personnel withinthis unit. A formal secondment of a staff member effective from January 2017 was approved bythe ADM municipal manager for a period of 3 months to support ASPIRE with SCM relatedmatters.

Amathole Economic Development Agency (SOC) Limited(Registration number 2005/030812/07)Trading as ASPIRE

Cash and Cash Equivalents as at 31 DECEMBER 2016DEC 2016 2016

AUDITEDR R

ABSA Cheque Account 234,533 169,205Petty Cash 58 95AEDA - STD Bank Cheque Acc 271076550 2,633,920 555,200Aspire - EC - Adopt a Spot Project 2,126,836 1,554,092EC-BCM Waste Mangement 53,989 754,854Aspire - Natural Resources Management 79,704 822,711AEDA - STD Bank Call Acc 388810769001 121,200 1,952,926HAR - STD Bank Cheque Acc 302012818 10,303 11,685NDPG - STD Bank Call Acc 388810769003 3,698 10,475,678Bwattle STD Bank Call 388810769 004 6,226 6,226EA - Operations (Bank) 7,151 7,904

Total Cash and Cash Equivalents 5,277,619 16,310,576

8. MSCOA & SAP ROLL-OUT

ADM council took a resolution on 29 January 2016 to include ASPIRE in the roll-out ofSAP(Financial Accounting System) as well as Municipal Standard Chart of Accounts (mSCOA)on the proviso that price negotiations ensue with the service provider.

Whilst ADM has progressed with Phase 1A, B and C (Accounts payable; Funds management;General ledger; Document management; SCM; Human Resources; Billing and Asset management)implementation, ASPIRE has been left out of this process. Subsequent communication andmeetings with ADM management indicate that there was never a budget provision for ASPIRE tobe supported in these reforms.

It is hoped that ADM will make the necessary provisions on their adjusted budget so as to ensurethat this council resolution if implemented as ASPIRE does not have to required financialresources for these reforms.

CONCLUSION

The Amathole District Municipality received an unqualified audit opinion with emphasis of matter

issues for the 2015/16 financial year. The audit report contains findings on matters relating to

non-compliance with certain laws and regulations as a result of weak internal controls. The

emphasis of matter paragraphs do not influence the audit opinion issued. The non- compliance

findings prevent the achievement of a clean audit.

In summary, the mid- year budget assessment indicates that ADM has not overcome its cash flow

constraints as the liquidity ration remains well below the norm and all cash held in bank accounts

is fully committed. The budget adjustment will require adjustments to increase expenditure items

as well as possibly to reduce service charges.

Considering the entity’s financial performance as at 31 December 2016, the continued financial

sustainability, given its cash-flow constraints is concerning. Without an adequate financial

injection from the parent municipality over the medium to long-term, future continued operations

are dismal. The current budget for the entity requires to be adjusted downwards as most of the

funding anticipated to be received from various funders has not been realized. This process will

also serve as an attempt to severely curtail expenditure and focus only on key line items necessary

to keep the entity afloat.

STAFF IMPLICATIONS

There are no staff implications.

FINANCIAL IMPLICATIONS

There are no financial implications associated with the drafting of the report.

OTHER PARTIES CONSULTED

ADM Internal Structures.

ATTACHMENTS

Annexure A - Mid-year Performance Report

Annexure B – ASPIRE Mid-year Performance Report Attachments

Annexure C – Schedule C Reporting Format (Refer Schedule G)

Annexure D – In-year Reporting Pack

RECOMMENDATIONS

[a] That the Mid-year budget and performance assessment report for 2016/17 for Amathole

District Municipality (ADM) and its municipal entity, ASPIRE be noted.

[b] That the request by ASPIRE to supplement their operating expenditure allocation from

ADM during the adjustment budget be declined due to cash constraints of the parent

municipality.

[c] That the application for extensions and non-compliance with time provisions of Schedule

G of the MBRR be noted.

[d] That the need for an adjustment budget for the 2016/17 is required.

1 ADM 2016/17 MID-YEAR PERFORMANCE REPORT|

AMATHOLE DISTRICT MUNICIPALITY

MID YEAR PERFORMANCE REPORT

2016/2017 FINANCIAL YEAR


TABLE OF CONTENTS

1. INTRODUCTION ……………………………………………………………………………………………………………………….. 3

2. PERFORMANCE MANAGEMENT IMPLEMENTATION AT ADM …………………………………………………… 3

2.1 PROGRESS ON RESOLVING CHALLENGES IDENTIFIED IN THE 2014/2015 and2015/2016 ANNUAL REPORTS …………………………………………………………………………………………….. 4

3. SERVCE DELIVERY PERFORMANCE ASSESSMENT …………………………………………………………………….. 10

3.1 ORGANISATIONAL SERVICE DELIVERY & BUDGET IMPLEMENTATION PLAN / MUNICIPALSCORECARD ……………………………………………………………………………………………………………………… 11

4. GENERAL RECOMMENDATIONS ……………………………………………………………………………………….. 28


1. INTRODUCTION

The purpose of this report is to account to public on the 2016/2017 mid-year institutional performance ofAmathole District Municipality. The report contains information which is based on the SDBIP formulated forthe financial year 2016/2017. The information on the report concentrates on the service deliveryperformance assessment as contained in the municipality’s Service delivery and budget Implementationplan. The report was compiled using 1st and 2nd quarter performance information received for the mid-year assessment.

Section 72 of the Municipal Finance Management Act requires that the Accounting Officer of a municipalityto by the 25th January each year:-

(a) Assess the performance of a municipality during the first half of the financial year, taking intoaccount

(i) the monthly statements(ii) the municipality service delivery performance during the first half of the financial

year and the indicators and targets as per service delivery and budgetimplementation plan

(b) Submit a report on such assessment to(i) the Mayor of the municipality(ii) the National Treasury(iii) the relevant Provincial Treasury

The Amathole District Municipality is reporting for the institutional performance relating to 2016/2017financial year, as required by the Municipal Systems Act No 32 of 2000 and Municipal Finance ManagementAct No 56 of 2003. In terms of section 72 of the Local Government: Municipal Finance Management Act(ActNo.56 of 2003) the accounting officer of a municipality must, by the 25 January of every year, assess theperformance of the municipality during the first half of the financial year. In terms of section 51(1), the mayormust report to the council by the 31st of January of the financial year.

2. PERFORMANCE MANAGEMENT IMPLEMENTATION AT AMATHOLE DISTRICT MUNICIPALITY

It must be noted that the first half of the financial year was an audit period, where Auditor General conductedaudits on both finance and performance information. The municipality once again received an unqualifiedaudit opinion with emphasis of matter issues for the 2015/16 financial year. The AG’s report on performancemanagement was also a positive one with no material findings. A detailed report on the AG’s findings formspart of 2015/16 Annual report.

The second quarter of 2016/2017 was a mid-year assessment period for both budget and performanceinformation as per section 72 of the MFMA.


2.1. PROGRESS ON RESOLVING CHALLENGES IDENTIFIED IN THE 2014/2015 AND 2015/2016 ANNUALREPORTS

2014/2015

The Amathole District Municipality received an unqualified audit opinion with emphasis of matter issues forthe 2014/15 financial year. It must be noted that the ADM had fully disclosed the matters noted under theEmphasis of Matters paragraph. The audit report also contains findings on a few matters relating to non-compliance with certain laws and regulations and inadequate internal controls. The matters of non-compliance do not influence the opinion issued. Once again the municipality received “a clean audit opinion”on the audit of performance information.

In order for the municipality to achieve a clean audit, it must obtain an unqualified audit opinion, no itemsidentified within the Emphasis of Matter paragraphs and no findings on non-compliance with laws andregulations. In addition the municipality should ensure that there are no significant weaknesses in internalcontrols.

The Auditor General was of the opinion that Senior Management did not always exercise adequateoversight responsibility over reporting on pre-determined objectives, compliance and related internal controls.This was the result of not adequately monitoring the functioning of internal controls, in year reporting andprogress with the implementation of the audit action plan. As a result non-compliance with the MFMA andmaterial misstatements on the annual performance report were only identified during the audit process.

To ensure that all audit findings are addressed, an audit action plan was developed which assign plannedresponses, responsibilities and timeframes to relevant officials. This is currently being monitored andreviewed by related HOD’s to ensure that all issues raised by Auditor General are addressed.

Below is the progress made as at December 2016 on the 2014/15 Audit Action Plan. Out of 50 actions to beundertaken, 8 has not been fully addressed.

Legend

Not yet addressedIn progress/not fully resolvedResolved


Audit Action Plan - Dashboard - SECOND QUARTERParno. Finding Directorate Legend

1

1. Ex.13 - Procurement and contract management: Quotations obtained fromsuppliers not listed on the database BTO - SCM

2

2. EX 88- Trade and other payables: Suppliers not paid within 30 days fromreceipt of invoice (Ex.88)

BTO - SCM &Expenditure

3

9. EX.14 -Expenditure : suppliers not paid within 30 days from receipt of invoice(Ex 14)

BTO - SCM &Expenditure

4

10. EX. 101- Cash Flow Statement: Differences in net cash flows from investingactivities (Ex.101) BTO - Acc & Rep

5EX .1 - Commitments: Internal control deficiencies identified (Ex.1)

BTO - Acc & Rep& SCM

6

12. Ex.106- Contingent Assets: No Supporting confirmation for the amountsdisclosed as contingent assets (Ex.106) N. Armstrong

73.EX.53 - Employees cost: Mis-statements identified on allowances ( Ex.53)

CorporateServices - HR

8

14. EX .98 - Employee costs: leave encashment not accurately recorded andoverstated (Ex.98)

CorporateServices - HR

9

15. EX.3- Financial Statements preparation: Quarterly financial statements notreviewed and finalised (Ex. 3) BTO - Acc & Rep

10

3.EX. 38- Irregular expenditure: Differences between the schedule betweenirregular expenditure and the financial statements ( Ex. 38) BTO - Acc & Rep


11

17. EX.108- (Agree) Procurement & Contract Management: Suppliers in whichofficials with an interest did not declare the connection ( Ex.108) BTO - SCM

12

18. EX 110- Procurement & Contracts Management: Awards made to supplierswhose directors are in the service of the state (Ex.110) BTO - SCM

13

19. EX.113 - (Disagree) Procurement & Contract Management: Constructioncontracts not registered with CIDB (Ex.113) BTO - SCM

14

20. EX.4- Procurement & Contract Management: Awards to close family membersof employees not disclosed (Ex.4) BTO - SCM

15

21. EX.7- (Partly resolved) Procurement & Contract Management: Suppliers inwhich partners and associates and close family members of employees had aninterest ( Ex.7) BTO - SCM

16

22. EX. 73- (Disagree) Procurement & Contract management: SITA not notifiedon IT transaction above R50 million (Ex.73) BTO - SCM

17

23.EX.74- Procurement & Contract Management:- Documentation of reasons forscoring bids according to functionality criteria not done (Ex.74) BTO - SCM

18

24. EX.75- (Partially Resolved) Procurement & Contract Management: Deviationdeemed as inappropriate (Ex.75) BTO - SCM

19

25. EX.81 - (Agree) Procurement & Contract Management: Deviations notreported to council and reported in AFS ( Ex.81) BTO - SCM

20

26. EX.92 - Fruitless & Wasteful Expenditure: Unexplained delays in recoveringexpenditure from responsible officials ( Ex. 92) BTO - SCM

2127. EX.39 - Intangible assets: Variance between AFS and FAR (Ex.39) BTO - Assets


22

28. EX-86 - Investment Property: Incorrect amount disclosed in the prior perioderror ( Ex.86) BTO - Assets

23

29. EX. 102- Infrastructure Assets: Differences between prior period error andsupporting ( documentation (Ex.102) BTO - Assets

24

30. EX.107 - (Agrees) Non- Infrastructure Assets (Journals): Inadequate supportingdocumentation for journals (Ex107) BTO - Assets

25

31. EX.2- Property, Plant and equipment: Prior year internal control deficienciesnot addressed timely (Ex.2) BTO - Assets

26

32. EX.24- Non- Infrastructure Assets: Differences between prior year amountsand correspondence amounts per current year ( Ex.24) BTO - Assets

27

33. EX-33- Non- Infrastructure Assets: Difference between the financialstatements and fixed assets register (Ex.33) BTO - Assets

28

34. EX.42 - Non - Infrastructure Assets: Assets register not GRAP Compliant(Ex.42) BTO - Assets

29

35. EX.43 - ( partially resolved) Non- Infrastructure Assets: Incorrect depreciationcalculation ( Ex. 43) BTO - Assets

3036. EX.54 - Non - Infrastructure Assets: Incorrect revaluation calculated (Ex. 54) BTO - Assets

31

37. EX.57 - Infrastructure Assets: Infrastructure Assets register not GRAPcompliant (Ex.57) BTO - Assets

32

38. EX.58 - Infrastructure Assets: Additions not included in infrastructure assetsregister and depreciations not accounted for ( Ex.58) BTO - Assets

33

39. EX. 84 - ( Agree) Non - Infrastructure assets: Assets not recorded in therecorded in the assets register (Ex.84) BTO - Assets


34

40. EX.93 - (Agree) Infrastructure Assets: WIP understated by projects withnegative balances in the WIP register (Ex.93) BTO - Assets

35

41. EX.15 (Agree) Expenditure: Expenditure recorded inclusive of input VAT (Ex.15) BTO - Expenditure

36

42. EX. 63 - Expenditure: Order not approved by delegated officials and requirednumber of quotations not obtained ( Ex.63) BTO - SCM

37

43. EX.64 - Expenditure: Number of attendees not confirmed for cateringpurposes ( Ex.64) BTO - Expenditure

38

44. EX.66- Expenditure: Improper tax clearance certificate attached to thepayment ( Ex.66) BTO - Expenditure

39

45. Ex-10- AoPo: Deficiencies identified on provision of water and sanitation(Ex.10)

Engineering -O&M

40

46. EX.12- ( Adjust) AoPo: Target for number of household with new waterconnections understated. (Ex.12)

Engineering -O&M

4147. EX.26- (Agree) AoPo: Inconsistencies between IDP, SDBIP, and APR ( Ex.26)

StrategicDepartment -PME

42

48. EX.96- (Agree) AoPo: Reported target for the number of households suppliedwith new VIP toilets is misstated (Ex.96)

Engineering -O&M

43

49. EX.97 - (Adjust AoPo: Reported target for number of newly registered indigentcustomers is overstated ( Ex.97) BTO - Revenue

4450. Inadequate design of ICT Governance documentation

StrategicDepartment - ICT


4551. Security management controls not designed


4652. User access management controls not designed and implemented


4753. Monitoring of vendor access and program testing not designed


4854. IT service continuity controls not designed and implemented


4955.EFT controls not designed BTO - Expenditure

50

56. Consolidated AFS: Differences identified on consolidated financial statements( Ex.16)

BTO - Acc& Rep &Expenditure


2015/2016

The Amathole District Municipality once again received an unqualified audit opinion with emphasis of matterissues for the 2015/16 financial year. The audit report also contain findings on a few matters relating to non-compliance with certain laws and regulations and inadequate internal controls. The matters of non-compliance do not influence the opinion issued.

In order for the municipality to achieve a clean audit, it must obtain an unqualified audit opinion, no itemsidentified within the Emphasis of Matter paragraphs and no findings on non-compliance with laws andregulations. In addition the municipality should ensure that there are no significant weaknesses in internalcontrols.

Below is a table detailing the findings of non-compliance with laws and regulations and weak internal controlstogether with the proposed remedial action.

No. Non-Compliance Issues Remedial Action1. Expenditure Management

Money Owed by the ADM was notalways paid within 30 days, as requiredby section 65(2)(e) of the MunicipalFinance Management Act

Reasonable steps were not taken toprevent irregular, 62(1)(d) of theMunicipal Finance Management Act

A register of invoices received by the ADMis utilized to track invoices within the ADM.Monthly reports are prepared to monitorcompliance with Section 65(2)(e). The ADMhad a 88% compliance rate, however due tocash flow constraints, invoices could notalways be paid within 30 days of receipt.Invoices could only be paid once cash hadbeen received.

The ADM has an approved policy forIrregular, fruitless and wasteful andunauthorized expenditure which isimplemented.

Procedures are in place to prevent, detect andrectify irregular expenditure, hence theimmaterial amount of irregular expendituredisclosed in the annual financial statements.

The irregular expenditure disclosed in theannual financial statements was identified bythe ADM

No Internal Control Remedial Action2. Leadership

Senior management did not alwaysadequately oversee reporting onpredetermined objectives, complianceand related internal controls. This wasthe result of not adequately monitoring

Controls and processes will be strengthened tocontinue to prevent and detect instances ofirregular expenditure. Timely reporting ofidentified and un-prevented instances of irregularexpenditure and fruitless and wasteful


the functioning of internal controls, in-year reporting and progress with theimplementation of the audit action plan.As a result, non-compliance with theMFMA and material misstatements onthe annual performance report were onlyidentified during the audit process

expenditure will continue to be performed tofacilitate investigation by Council if required.

Reports on Irregular Expenditure are presented toboth the Audit and Risk Committee and MPACcommittee for consideration and the exercise offurther oversight

Monthly financial dashboards and the AuditAction plan are presented at the EMC and AuditCommittee

Section 71 reports are presented to the MPACcommittee

Timely reporting in all council structures andstrengthening of internal controls

3. Financial and PerformanceManagementThe annual performance reportsubmitted for auditing containedmaterial misstatements due to a lack ofdocumented standard operatingprocedures for the recording of actualachievements and inability to producesufficient and appropriate supportingevidence for reported performance.These material misstatements weresubsequently corrected. In addition,compliance with applicable legislationwas not adequately monitored duringthe year, which resulted to materialcompliance findings.

For non-compliance issues refer to point oneabove

Creating a register for monitoring theDevelopment of Standard Operating Proceduresfor all SDBIP indicators

4. GovernanceAlthough the internal audit unit andaudit committee met regularlythroughout the year, they did notidentify, report and recommendimprovements to deficiencies to keycontrols necessary for credible reportingon predetermined objectives to theaccounting officer during the year underreview. Consequently, materialmisstatements in the annualperformance report as well as instancesof non-compliance with legislation wereonly identified during the audit process

Management are to use internal audit reports as atool to assist in improving control weaknessesand becoming audit ready.

Action plans are developed by management toresolve findings by the Internal Audit unit.

The monitoring and presenting of these plans tothe EMC and Audit and Risk Committees toassist in adequate and timely implementation willcontinue and be strengthened.

Constant review of performance at all levels Review of Performance Information by Head of

Departments


3. SERVICE DELIVERY PERFORMANCE ASSESSMENT

The report is based on the analyzed and evaluated information through a process whereby information ofthe key performance area, objectives, key performance indicators, programs/projects reflect the IntegratedDevelopment Plan objectives of the Municipality for 2016/2017 financial year. Institutional and departmentalperformance of Amathole District Municipality is based on the Service Delivery Budget Implementation Plan(SDBIP) scorecard. The SDBIP of the municipality comprises of five Key Performance Areas which are derivedfrom Local Government’s Strategic Agenda. These are:

Institutional Transformation and Organizational Development; Basic Service Delivery and Infrastructure Investment; Local Economic Development; Financial Viability and Management; and Good Governance and Public Participation

A Service Delivery Budget Implementation Plan (SDBIP), which is a top level scorecard of the institution wasdeveloped, together with Departmental SDBIPs for each of the department of the municipality, in line withappropriate guidelines and legislation. All Section 56 Employees signed Performance Agreements, asprescribed in the Local Government: Municipal Performance Regulations for Municipal Managers andManagers directly Accountable to the Municipal Manager, and in line with published regulations and/oramendments.

Quarter 1 assessments were conducted during October 2016 and Quarter 2 evaluations were performed inJanuary 2017 through the Office of the Municipal Manager. The Mid-year assessment is therefore based onthe Service Delivery Budget Implementation Plan for the period 01 July 2016 to 30 June 2017.

The Amathole District Municipality conducted its technical strategic planning early in January 2017 which fedinto its Institutional strategic planning held later in January 2017. The Institutional strategic planningculminated into a review of quite a number of plans as part of addressing all the challenges relating to areasof finance and service delivery.


3.1 MID-YEAR 2016/2017 SDBIP PERFORMANCE

INSTITUTIONAL SDBIP PERFORMANCE OVERALL SUCCESS RATE

The ADM overall performance level was comparatively the same for Quarter One (1) and Quarter Two (2). In both quarters Seven (7) Targetswere not achieved. Challenges experienced in Quarter 1 and 2 can be associated with the current financial situation of the institution wherein thereis a cash-flow predicament. This affected the overall performance of the institutions as quite of number projects could not be implemented. As aresult proposals were made for amending the current SDBIP.

The table below depicts the performance of the district in relation to key performance areas in the SDBIP.

SUMMARY OF ORGANISATIONAL PERFORMANCE FOR QUARTER 2 (TOP LAYER SDBIP 2016/17)

KEY PERFORMANCE AREAS OutstandingPerformance

(5)

PerformanceSignificantly

aboveexpectation

(4)

FullyEffective (3)

PerformanceNot fully

Effective (2)

UnacceptablePerformance

(1)

NotApplicable

TOTAL

Municipal Transformation andOrganizational/InstitutionalDevelopment

1 0 4 0 1 0 6

Good Governance and PublicParticipation 3 0 12 0 0 1 16

Municipal Financial Viability 3 1 5 1 0 1 11

Local Economic Development 0 1 10 1 0 0 12

Basic Service Delivery 1 5 4 4 0 0 14

TOTAL 8 7 35 6 1 2 59


SUMMARY OF ORGANISATIONAL PERFORMANCE FOR QUARTER 1 (TOP LAY SDBIP 2016/17)

KEY PERFORMANCE AREASOutstandingPerformance

(5)

PerformanceSignificantly

aboveexpectation

(4)

FullyEffective

(3)

PerformanceNot fully

Effective (2)

UnacceptablePerformance(1)

NotApplicable TOTAL

Municipal Transformation andOrganizational/InstitutionalDevelopment 0 0 5 1 0 0

6

Good Governance and PublicParticipation 3 0 12 0 0 1 16

Municipal Financial Viability1 3 3 3 0

1 11

Local Economic Development1 0 11 0 0

0 12

Basic Service Delivery 0 3 7 3 0 1 14

TOTAL 5 6 38 7 0 3 59


SUMMARY OF ACHIEVEMENTS AND CHALLENGES ON THE SDBIP

Achievements and challenges pertaining to targets set for Quarter 1 and Quarter 2 are narrated below.

INDIREF

INDREF

INDICATOR TARGET Q2 RESULTS Q1 RESULTS

KPI1

MTI1/1

Turnaround timein filling of critical,vacant andbudgeted postsTurnaround timeto fill existing,critical budgetedvacant posts

3 months turnaroundtime to fill existing,critical budgetedvacant posts

The filling of existing, critical funded andvacant posts has been done within 3months turnaround time. SAP engagementreport is availed with 16 memorandums ofrequests approved by the MunicipalManager.

The filling of existing, critical funded and vacantposts has been done within 3 months turnaroundtime. Engagement reports are availed with thememorandum approved by the Municipal Manager.

KPI2

MTI1/2

% increase infemalerepresentation inline with theEmploymentEquity Plan

0.5 % increase infemale representationin line with theEmployment EquityPlan

1.53 % increase in female has beenachieved in line with the EmploymentEquity Plan. A quarterly report andengagement report indicating newappointments during quarter 2 on femalesis availed.

0.68 % increase in female has been achieved inline with the Employment Equity Plan. A quarterlyreport and engagement report indicating newappointments during quarter 1 on females isavailed.

KPI3

MTI1/3

% Increase ofDisabledemployeesemployed in linewith theEmploymentEquity Plantargets

0.19 % Increase ofemployees living withdisabilities

No person living with disability has showninterest in the posts advertised this quarter,hence the target is not met

0.17 % increase of employees living with disabilitieshas been achieved in line with the EmploymentEquity Plan. A quarterly report on appointmentsduring quarter 1. This is due to limited fundingallocated for vacancies; no control to appointpeople with disabilities due to disabled people notsubmitting applications; also successful candidatecannot be forced to declare his/her disability.


KPI4

MTI2/1

No. oforganizationalperformancereviewsconducted

Q1 2016/17Performance ReviewsConducted

Quarterly report on activities undertaken byPME, Q1 performance report, minutes andattendance register for HOD reviews heldon 27/10/16 are provided

Signed quarterly report on the activities undertakenby PME unit, Q4 performance report, minutes of theHOD reviews held on the 21/07/16 together with theattendance register are provided

KPI5

MTI2/2

No. of QuarterlyIndividualperformanceassessmentsconducted

Q1 16/17 IndividualPerformanceAssessmentconducted

Signed quarterly report on the activitiesundertaken by PME unit, institutional anddepartmental checklists together withcertificates of assurance for the STRATand MM's office

Signed quarterly report on the activities undertakenby PME unit, signed consolidated institutionalindividual Q4 report, institutional checklists togetherwith certificates of assurance for the MM's officeand the STRAT department

KPI6

MTI

3/1

No. of LRSPprojectsimplemented atKesikammahoekand DwesaCwebe

2 Situation Analysisreports

Quarterly report on 2 situational analysisreports together with Dwesa Cwebe reviewdevelopment plan and review of 9Keiskammahoek villages IDP are provided

Quarterly report on review of 2 development plans,Integrated development plan for 9 Kieskammahoekvillages together with Dwesa development review ofdevelopment plan are provided

KPI7

SDI

1/1

No. ofhouseholds withnew waterconnections

750 Householdsconnected to the watersupply

166 Households are connected to the watersupply against 750 on target. Supportingevidence of contractor practical completioncertificates are availed. The underachievement is due to few contractorsstarted with the implementation of theproject because the second tranche of MIGwas transferred late during the quarter(05/12/2016). A variance report is alsoavailed.

N/A

KPI8

SDI

1/2

No. of refurbishedWater ServicesInfrastructure asper theRefurbishmentPlan (Dams,

Progress onimplementation ofrefurbishment projects

Progress report is availed for quater 2 onthe implementation of refurbishmentprojects; Dutywa Dam,Butterworth and FortBeafort Waste Water Treatement Works (WWTW) and Dutywa Water TreatmentWorks (WTW) and WWTW , and Adelaide

The appointment of service providers to undertakerefurbishment work has been done. An appointmentletter (contract between ADM and Ceenex) isavailed dated 26/09/2016.


WTW’s &WWTW’s)

and Bedford (WTW). Supporting evidencefrom service providers is availed.

KPI9

SDI1/3

No. of householdsprovided withinterim watersupply

50 Householdsprovided with interimwater supply

67 households provided with interim watersupply against 50 on target. A certificate ofcompletion signed 15/12/2016 for ToleniInterim WS(Zibhityi ) is availed.

0 households were provided with interim watersupply this quarter and that is due to WSIG fundingthat has been transferred late towards the end ofthe quarter. These are conditions beyond ADM’scontrol as 2016 was Local Government electionyear, hence the delays in transferring of funds.

KPI10

SDI1/4

No. of newregisteredindigentconsumersreceiving 6kl freewater basicservices

500 new registeredIndigent consumersreceiving 6kl free basicwater service

641 Indigents were newly registered toreceive 6kl free basic water service. This isan over achievement against a set target of500 indigents. A supporting evidence ofapproved list by Municipal Manager and aSystem Printout of new indigents is availed.

861 Indigents were newly registered to receive 6klfree basic water service. This is an overachievement against a set target of 500 indigents. Asupporting evidence of approved list by MunicipalManager and a System Printout of new indigents isavailed.

KPI11

SDI1/5

% reduction onwater losseswithin 3 specifiedschemes in thedistrict

Progress report onimplementation ofWCDM projects andexpenditure report

Progress on the implementation of WaterConservation Demand Managementprojects is availed indicating work done andcommenced in Fort Beauford, Peddie,Adelaide, Alice Butterworth, Stutterheimand Kei Road.

Progress on the implementation of WaterConservation Demand Management projects isavailed indicating work done and commenced in thedistrict municipality.

KPI12

SDI1/6

No. of drinkingwater samplestaken todeterminecompliance withSANS 241

380 drinking watersamples tested

488 drinking water samples were testedagainst 380 on target. A report fromAmatola water with sample results isavailed.

461 drinking water samples were tested against380 on target. A report from Amatola water andexpenditure report is availed


KPI13

SDI

2/1

No. of wastewater samplestaken todeterminecompliance withGeneralAuthorisationStandards SDI3:2

47 waste watersamples tested

50 waste water samples were testedagainst 47 on target. A report from Amatolawater with sample results is availed.

46 drinking waste samples were tested instead of47 on target. A variance report explains that 1waste water sample could not be taken at thedesignated sampling point Seymour because apump was not functioning due to electricity cut as aresult of non-payment. Report from Amatola waterand expenditure report is availed for samples taken

KPI14

SDI2/2

Designed reportfor sanitationinfrastructureupgrade

Develop 2Topographical survey,3 draft details designsand 3 MIG registrationreports.

3 Topographical surveys in Hamburg,Hogsback and Kei Mouth have beendeveloped against 2 surveys on target,except for 3 MIG registration reports and 3draft details designs not completed duespecialist programme that took longer thananticipated

3 EIA reports are availed for Hogsback, Hamburgand Kei Mouth except for 3 Geotechnicalinvestigation reports not done this quarter. Theconsultant Royal Haskoning felt that there is noneed of these investigations at this stage of theproject. Supporting evidence is availed.

KPI15

SDI3/1

No. of LMs withbusiness licenseapplication formscomplying withMHS legislation

2 LMs with businesslicense applicationscomplying with MHSLegislation (Mnqumaand Mbhashe)

2 LMs, Mbhashe and Mnquma, have beenassisted to ensure that business licenseapplications comply with MHS Legislationduring quarter. Supporting evidence ofbusiness license applications is availed.

2 LMs (Amahlathi and Mbhashe) assisted to ensurethat business licence applications complying withMHS Legislation during quarter 1. Supportingevidence of business licence applications is availed.

KPI16

SDI4/1

No. of fire safety& emergencyfacilitiesconstructed

Progress onconstruction of 1 firesafety & emergencyfacility.

Construction has not commence, and theproject is still at the tender stage, wherebyan advert has been placed with a closingdate 17 February 2017 to secure acontractor. Supporting evidence is availed.

The contactor is not appointed. SCM identified riskassociated with the available budget. A meetingwith SCM resulted in the adjustments to biddocument to conform to the available budget.


KPI17

SDI4/2

% of availablebudget utilized toprocure reliefmaterial foremergencydisastersoccurred

25% of the availablebudget utilized toprocure relief materialfor affectedhouseholds

33.17 % of the available budget is utilisedto procure relief material for affectedhouseholds in Mnquma and Mbashe.Delivery notes and beneficiarydocumentations are availed.

31.3 % of the available budget is utilised to procurerelief material for affected households. Deliverynotes of relief material are availed with venusreports.

KPI18

SDI6/1

Solid WasteTransfer Stationcompleted in theEastern regionalsolid waste site(Amahlathi)

Progress report on themanagement ofeastern regional wastesite

Progress report on the management ofeastern regional waste site is availed withdetails of the operations carried on the site.

Due to non- availability of funds a memo for amonth to month appointment contract has beenapproved by the municipal manager. The report thatexplains the challenges experienced by thedepartment on the appointment process is availed.

KPI19

SDI7/1

No. of PublicTransport facilitiesupgraded

Progress on upgradingof the facility.

The contractor is not yet re- established onsite. The project was advertised and theitem tabled to the Bid Evaluation Committeeon the 19th October 2016. It must also benoted that the contractor of the terminatedcontract has requested that his terminationbe mediated by the Arbitration.

The contractor is not yet re- established on site.The project is advertised in September and theclosing date falls beyond quarter 1 (extended to07/10/2016). Moreover the terminated contractcontractor has requested that his termination bemediated by the Arbitration. Supporting evidenceavailed.

KPI20

SDI8/1

No. of LRSPprojectsimplemented

Progress report on 2LRSP projectsimplemented

Quarterly report on 2 situational analysisreports together with Dwesa Cwebe reviewdevelopment plan and review of 9Keiskammahoek villages IDP are provided

Quarterly report on implementation of 3 LRSPprojects, terms of reference for survey of cintsa eastinformal settlement, concept document for Nqadusettlement planning, terms of reference for planningof Nqadu great place settlement project and termsof reference for survey of Ndlovini settlement


KPI21

LED1/1

No. of Tourismmaster planprojectsimplemented

Progress Report onthe supported of 5Tourism Master Planprograms (TourismDevelopment, CraftCraft Development,Tourism Marketing andPromotion, TourismMentorship andCapacity building andTourism Events)

(a) quarterly report on crafters supported,attendance registers for crafters supportedin Mangaung African cultural festival heldon the 30/08-09/10/16 & craft mania held inAmahlathi LM dated 01-04/12/16, (b)attendance register for agri tourismmarketing day dated 25/11/16, (c) quarterlyreport on operationalization of VIC's withdelivery note , (d) quarterly report towardsLTO's and tour guides support withmarketing material, (e) agenda of theresponsible tourism seminar together withthe attendance register dated 06/10/16

Quarterly summation report on Tourism programessupported, attendance registers for the followingprograms: (a) Grahamstown Arts festival dated30/06-10/07/16, (b) Hambo loxolo hiking trail dated16/09/16 held in Ngqushwa LM, JHB getaway showdated 23-25/09/16, (c) attendance register forGrahamnstown festival where the craftersassociation were supported, (d) report andattendance register for vulture awareness daydated 23/09/16 and (e) report and brochure for wildcoast jikeleza are provided

KPI22

LED1/2

No. of Filmmakers supportedin 3 localmunicipalities

Progress report on thesupport of 3 FilmDevelopment Strategyprograms (FilmDevelopment, CreativeIndustry Support andMentorship andCapacity building)

Quarterly report on support provided to filmindustry; attendance registers for (a)Sondela film festival screening held on the30/09-02/10/16, (b) film workshop &screening held on the 14/10/16 at RaymondMhlaba LM, © auditions for Isingqisethucultural festival held on the 14/10/16 atMbhashe LM are provided

Summation report on the implementation of filmdevelopment and creative industry together withattendance registers for the following: letter ofconfirmation for 2 film makers that are attendingscript writers program, attendance register forinformal trade support dated 08/09/16 , attendanceregister for Mzantsi golden economy workshopdated 23/08/16 are provided

KPI23

LED1/3

No. of Heritagemanagement planprojectssupported

Progress Report onthe supported ofHeritage Managementprojects 4 (EarlyAfrican Intellectualslegacy, Conservationand Restoration ofHeritage Sites,Geographical, NameChange and HeritageAwareness)

(a) Quarterly report on conservation ofheritage sites(Chief Kama's grave),agenda, minutes and attendance registerfor a meeting for social facilitation regardingthe conservation of Chief Kama's graveheld on the 10/11/16 , (b) intellectualslegacy was achieved in the 1st quarter, (c)quarterly report, agenda, minutes andattendance register for geographical namechange program dated 21/11/16, (d)Heritage awareness conducted in Q1 andheritage forum held at Blue Cranemunicipality on the 26/10/16

Summation report on the implementation ofHeritage programs supported, (a) Earlyintellectuals legacy: agenda, attendance register &minutes for social facilitation meeting held in Ntabaka Ndoda dated 25/08/16, (b) Heritage awarenesscampaigns: agenda, minutes & attendance registerfor social facilitation meeting held in Ngqushwa LMdated 08/07/16, (c) Geographical name change:attendance register, agenda & minutes of socialfacilitation meeting held with DSRAC on the30/08/16 , and, (d) Terms of Reference for theconversation of Chief Kama grave site, (e) minutes,attendance register and agenda for heritage forum


held in Ngqushwa LM dated 14/09/16 have beenprovided

KPI24

LED1/4

No. of Agriculturaldevelopment planprogramssupported

Progress Report onsupported AgriculturalDevelopment Plan 3(Input Supply,Livestockimprovement,Emerging farmerssupport )

Summation report on agricultural programssupported, (a) Emerging farmer support:minutes and attendance register forformation of legal entities and site visits atNgqushwa LM dated 23/11/16 & 29/11/16,(b) Input supply: minutes and attendanceregister for mobilization & capacitation forestablishment of cooperative dated15/12/16, co-operative certificate ofregistration for Kotane co-op, UpperTongwana mobilization & capacitation toregister dated 14/11/16 (Mnquma LM),minutes & attendance register for a meetingto register co-op dated 09/11/16, 16/11/16held at Raymond Mhlaba LM, (c)Livestock improvement: list of beneficiariesfor support to Mbaxa farming project areprovided

(a) Progress report on emerging farmers supportprovided together with project site visit forms forNtsinekana beefkeeping and Mgwangqa inNgqushwa LM dated 11/08/16 and 08/09/16respectively, (b) progress report on implementationof input supply together with attendance register forstakeholder engagement meeting dated 06/09/26& 19/09/16 and , (c) progress report on theimplementation of livestock improvement togetherwith attendance register for mobilization andcapacitation meeting dated 30/08/16 are provided,attendance register for information day on beef heldin Amahlathi LM dated 17/08/16 and attendanceregister for agricultural research scheme meetingdated 16/08/16 are provided

KPI25

LED1/5

No. ofinfrastructure ruraldevelopmentprojectssupported

Progress report on thesupported RuralDevelopment Strategyprograms (through theparticipation in theAgri-Park)

Quarterly report on the supported Ruraldevelopment programs, feedlot buy inmeeting form together with attendanceregister dated 11/10/16 held at Mnquma LM

Quarterly report on rural development programmestogether with attendance register for mobilizationand capacitation meeting and forum meeting held atMnquma LM dated 30/08/16 and 30/08/16respectively are provided

KPI26

LED1/6

No. ofEnvironmentalmanagement planprogramssupported

Progress report on thefacilitated of 5IntegratedEnvironmentalmanagement Planprojects: Renewableenergy, Air quality,Climate change, Blue

Summation report on 5 environmentalprograms supported: (a) Air quality: reportand attendance register air qualitycompliance activity held on the 06/12/16 atRaymond Mhlaba LM, (b) Blue flag:facilitation of development of a contractbetween Ngqushwa LM and Path Caretogether with attendance register for blue

Progress report on the implementation ofenvironmental programmes supported; (a)Awareness program: progress report on thefacilitation of arbour week held, attendance registerfor the arbour week celebrations held @ MbhasheLM dated 09/09/16, attendance register for arbourcelebrations held at Raymond Mhlaba LM on the26-27/09/16, (b) Air quality: progress report on the


Flag and Awarenessprogram

flag awareness held on the 05/12/16 atNgqushwa LM, (c) Climate Change: reportand attendance register of awarenessprogram held on the 23/11/16 at RaymondMhlaba LM, (d) Awareness program: reportand attendance register for Marine weekcelebrations held on the 12/10/16 atMnquma LM , (e) Renewable energy: reportand attendance register for site visit andlight installation held on the 29/11/16 atGreat Kei LM

identification of air quality site together withattendance register for meeting held at NgqushwaLM dated 26/08/16, (c) Blue flag: progress report onthe support on the blue flag program: blue flagapplication form, identified schools form NgqushwaLM, blue flag awareness campaign held at MnqumaLM dated 20/09/26, (d) Climate change: progressreport together with attendance register forstakeholder consultation held at Raymond Mhlabadated 06/07/16 and; (e) Renewable energy:progress report on facilitation of renewable energytogether with attendance register for surveyconducted dated 01/09/16 are provided

KPI27

LED1/7

No. ofCooperativessupported withinthe district

Progress Report on 3Cooperatives’ Strategyprogram facilitated (Annual cooperativeIndaba, Co-opssupport program,CooperativeDevelopment Centre)

Summation report on 3 cooperativeprograms supported; (a) Annual Indaba:report and attendance register for build-upsession towards annual indaba held on the04/1016 at Mnquma LM, (b) CoopsDevelopment center: report and attendanceregister for 2 co-op capacity building heldon the 20/10/16 & 15/11/16at Mnquma LM,© Co-ops support program: report andattendance register for co-ops awarenessand forum held on the 15/11/16 and14/11/16 at Mnquma LM at DEDEATregional office respectively

Summation report on 3 cooperatives programssupported; (a) attendance register for cooperativesforum meeting held on the 25/07/16, (b) attendanceregister for stakeholder training dated 17/08/16 and© terms of reference for review of cooperativesstrategy

KPI28

LED

1/8

% of SMME thathave benefitedfrom a SMMEsupport programwithin the district

Report on 2.5% ofSMME's that havebenefited from ADM

Quarterly report together with a tender listof 18 SMME's supported howevercalculations could not be re-performed dueto non-availability of 16/17 financial yearSMME database

Quarterly report on 10 SMME’s supported howevercalculations could not be re-performed due to non-availability of 16/17 financial year SMME database


KPI29

LED1/9

No. of SMMEdevelopmentprogramsimplemented

Progress report onSMME supportedNetworking Platform

Summation report on SMME's supported,attendance register for preparatory meetingfor the Berlin fashion show dated 14/10/16,together with the list of designers whoparticipated in the Berlin fashion show andattendance register dated 26/11/16 areprovided

Summation report on 3 SMME's supported:attendance register for Grahamstown arts festivaldated 30/06-10/07/16, attendance register fordelivering of banners to SMME' s attending theGrahamstown arts festival dated 06/07/16,attendance register for capacity building forSMME's held at Mnquma LM dated 31/08/16,attendance register for preparatory meeting forwomen’s month dated 16/08/26

KPI30

LED

1/10

No. of jobscreated usingEPWP program

200 jobs createdutilizing EPWP

Quarterly report on EPWP, list of jobscreated per ward together with names 298beneficiaries are provided

Quarterly report on identified beneficiaries, list of250 beneficiaries and list of projects to beimplemented are provided

KPI31

LED

1/11

No. of informaltraders supported

2 Informal Tradesupport programsInformal TradeAssociation support)

Summation report on 2 informal traderssupported, minutes and attendance registerfor informal trade association support andestablishment held on the 12/10/16 atMnquma LM and 20/11/16 at RaymondMhlaba respectively

Terms of reference for proposals and briefing ofInformal traders strategy, terms of reference forAmathole Industrial Development Strategy, minutesand attendance register for women’s daypreparatory meeting held at Mnquma LM dated05/08/16, minutes and attendance register fromCIDP dated 26/08/16, minutes of fashion designerforum and attendance register dated 27/09/16 areprovided

KPI32

LED

1/12

No. of candidatesparticipating inskills programcreated throughHRD Strategy

Monitoring ofattendance & Paymentof stipends

Monitoring of attendance & payment ofstipends is happening. A quarterly report tothat effect, payday report and attendanceregister of interns are availed.

Monitoring of attendance & payment of stipends ishappening. A quarterly report to that effect, paydayreport and attendance register of interns areavailed.

KPI33

MFV1/1

Financial viabilityexpressed byDebt Coverageratio

3

A debt coverage ratio of 4 against a ratio of3 targeted is obtained for the 1st Quarter.Supporting evidence is availed.

A debt coverage ratio of 8 against a ratio of 3targeted is obtained for the 4th Quarter. Supportingevidence is availed


KPI34

MFV1/2

Financial viabilityexpressed byOutstandingservice debtors torevenue ratio

90%

An outstanding service debtor’s ratio of 33% is achieved against a set target of 90% torevenue ratio. This is an overachievementsince a lower rate of debtors must bemaintained. Supporting evidence is availed.

An outstanding service debtor’s ratio of 77 % isachieved against a set target of 90% to revenueratio. This is an overachievement since a lower rateof debtors must be maintained. Supportingevidence is availed

KPI35

MFV1/3

Financial viabilityexpressed byCost Coverageratio

1

Cost Coverage ratio of 1 is achieved as seton target.

Cost Coverage ratio of 0.4 is achieved against aratio of 1. This is because of cash flow constraintsthat are prevalent while expenditure demands haveconsistently grown. Supporting evidence is availed

KPI36

MFV1/4

% billing ofbillable meteredhouseholds

99% reading onbillable meters

99% on reading billable meters achieved. ABP421 Report is availed as evidence.

99% on reading billable meters achieved. A BP421Report is availed as evidence.

KPI37

MFV1/5

% budget spenton MIG funding

Not less than 100%targeted amount

R72 226 819.99 (65.17%) of the MIG hasbeen expended against R110 823 503 (100%) on target. This is however due to somedelays on the second MunicipalInfrastructure Grant (MIG) tranche as it isnormally transferred on 25th November butwas only transferred on the 05th Decembertowards the end of the expenditure period,resulting to a balance not being possible tobe utilized under quarter 2.

R 77 777 357.95 has been spent against budgetedR 122 698 433. This is due to the fact that NationalTreasury transferred R82 500 000 for the firsttranche at the target has been set before theCOGTA indicated the amount to be received. All inall the department spent 94 % of the first trancheagainst 90 % budgeted of the expected tranche(R122 698 433).

KPI38

MFV1/7

% of invoicespaid within 30days of receipt

100% of Invoices paidwithin 30 days ofreceipt

100 % of Invoices are paid within 30 daysof receipt. A supporting evidence is availed.

Only 91.7 % of invoices is paid with 30 days andthat is due to cash flow constraints. Supportingevidence is availed

KPI39

MFV1/8

% budget spenton implementingWorkplace SkillsPlan

N/A N/A Not Applicable for reporting this quarter


KPI40

MFV1/9

% total collectionon outstandingdebts

15% collected onoutstanding debt perdebtor categories (A, Band C)

32% on outstanding debt per debtorcategories (A, B and C) is collected against15% on set target.

30% on outstanding debt per debtor categories (A,B and C) is collected against 20% on set target.

KPI41

MFV1/10

% collected onleased ADMBuildings

100% Collected onleased ADM Buildings

Only 71% is collected from ADM leasedbuildings. The shortfall is caused by theDepartment of Health, a tenant of ADMbuildings in Cathcart and Stutterheim.Several reminders made by BTO andCorporate Services became unsuccessfulresulting to ADM issuing a notice to restrictwater to the tenant.

100 percent of the receipts on amounts collectedfrom ADM leased buildings are availed, provingamounts that were received and some tenants havepaid in advance.

KPI42

MFV1/11

% update of theassetmanagementsystem

100% Updated andaccurate Move -ableAsset Register withadditions anddisposals

100% of updated and accurate move-ableasset register is achieved. Copy of theAsset register (system printout showingadditions and disposals during quarter 2) isavailed together with list of additions anddisposals occurred during the quarter.

100% of updated and accurate move-able assetregister is achieved. Copy of the Asset register(system printout showing additions and disposalsduring quarter 1) is availed.

KPI43

MFV1/14

% reduction in thenumber ofdeviations

Reduction in numberof deviations by 5 %

55 % reduction in number of deviations isachieved against 5% on target, a greatachievement to be noted. A register ofdeviations and proof of submission toCouncil on the 09/12/216 is availed.

5% Reduction in number of deviations has not beenachieved for the year. This non achievement is theresult of the emergency procurements beingundertaken by O&M division within the Engineering.Also, all the memoranda are not being provided toSCM once the final approval has been provided forpayment. Furthermore, O&M unit are not utilizingthe service providers on the contract register asthey are of the opinion that the said serviceproviders do not have the relevant expertise.

KPI44

GGP1/1

% Implementationof Internal Auditaction planssubmitted to EMC

Progress report onImplementation ofInternal Audit action

Quarterly report and internal audit actionplan on audits conducted with progress onthe actions together with EMC agendadated 09/12/16 are provided

Signed quarterly report on progress onimplementation of internal audit action plans,internal audit tracking document, EMC agenda


plans submitted toEMC

dated 04/10/16 and IT audit findings register areprovided

KPI45

GGP1/2

% Implementationof Auditor Generalaction planssubmitted to EMC

N/A Not Applicable during quarter 2 Not Applicable during quarter1

KPI46

GGP1/3

No. of RiskManagementreports submittedto Audit and RiskCommittee

1 Risk ManagementReports submitted toAudit and RiskCommittee

Quarterly report on activities undertaken byRisk management, Risk steering committeeattendance register and minutes, agendadated 25/10/16, risk registers forInstitutional , ENG, Corporate services,agenda, minutes and attendance registerfor audit and risk committee dated25/11/16, risk management committeemeeting agenda, minutes, trackingdocument are provided

Copy of Public sector risk management framework,STRAT risk register, institutional risk register, BTO,Community risk register, system screen shot ofestablished risk tolerance, item on risk action plan,risk and audit committee minutes and attendanceregister dated 22/08/16, risk and steeringcommittee minutes and attendance register for risksteering committee dated 25/08/16 are provided

KPI47

GGP1/5

15/16 AnnualReport andAnnual FinancialStatementssubmitted to AGand Council

Draft audited AnnualReport 15/16 withAFS

Quarterly report on activities undertaken byPME unit, draft audited annual reporttogether with oversight report are provided

Signed quarterly report on activities undertaken byPME unit, Consolidated 15/16 annual report,acknowledgement by Auditor General dated31/08/16 together with Council agenda dated31/08/16 are provided

KPI48

GGP1/6

Monthly budgetstatement & Mid-year budgetassessmentreports submittedto Mayor,Provincial &NationalTreasuries

3 monthly reports onS71 reportingsubmitted within 10working days after theend of the month tothe Executive Mayor,Provincial Treasuryand National Treasury

3 monthly reports on S71 reporting aresubmitted within 10 working days after theend of the month to the Executive Mayor,Provincial Treasury and National Treasury,Supporting documentation to that effect isavailed, together with Municipal Manager'sQuality certificate.

3 monthly reports on S71 reporting are submittedwithin 10 working days after the end of the month tothe Executive Mayor, Provincial Treasury andNational Treasury, supporting documentation to thateffect is availed, together with Municipal Manager'sQuality certificate.


KPI49 GGP

1/7

% of Councilresolutionsimplementedannually

Quarterly progressreport on the Councilresolutionsimplemented

Quarterly report on the resolutions, actionplan and proof of submission to Councildated 09/12/16 are provided

Quarterly report on implementation of councilresolutions reflecting that action plan has not beensubmitted to Council due to the late-sitting of theone scheduled meeting and the action plan will betabled for confirmation

KPI50

GGP1/8

Turnaround timetaken in initiatingdisciplinary andgrievance casesreported

3 months turnaroundtime taken in initiatingdisciplinary andgrievance casesreported

A report on 3 months turnaround time takenin initiating disciplinary and grievance casesreported is availed with reported casesregister and attendance registers.

A report on 3 months turnaround time taken ininitiating disciplinary and grievance cases reportedis availed with reported cases register andattendance registers.

KPI51

GGP2/1

2017- 2022IntegratedDevelopmentPlan submitted toCouncil forapproval

IDP situationalanalysis report

Quarterly report on activities undertaken byPME unit together with the IDP situationalanalysis report are provided

Signed quarterly report on activities undertaken byPME unit, draft 17/18 IDP process plan togetherwith council agenda dated 31/08/16 are provided

KPI52

GGP2/2

Budget &Adjustmentbudget submittedto Council forapproval

Budget guidelinessubmitted to all HOD's

Budget guidelines are submitted to allHOD's. Copy of the guidelines and a proofof submission to HOD`s dated 13/12/2016is availed.

A Budget Process Plan is submitted to Council heldon 31/08/2016. Supporting evidence of a signedquarterly report, Budget Process Plan and CouncilAgenda are availed.

KPI53

GGP2/3

Developed ADMLong term Vision(2030) submittedto Council forapproval

Develop ADM longterm plan (vision 2030)situational analysesreport

Quarterly report on situational analysisformulation for Vision 2030 together withsituational analysis are provided

Progress report in respect of the inception reportfor the framework document for ADM together withinception report for vision 2030 framework areprovided

KPI54

GGP2/4

No. ofmunicipalities with

Progress report on 7IGR forumscoordinated

Quarterly report on IGR forums coordinatedwith attendance registers for IGR meetingsheld on the 30/11/16 at Raymond MhlabaLM, 24/11/16 at Amahlathi LM, 09/12/16 at

Quarterly report on IGR forums coordinatedtogether with attendance register Mnquma,Ngqushwa, Great kei, Mbhashe & Amahlathi) dated19/09/16, 30/09/16, 30/09/16, 22/09/16 & 28/09/16


functional IGRStructures

Mbhashe LM, 08/12/16 at Ngqushwa LM,08/12/16 at Mnquma LM reflecting the non-sitting of Great Kei LM

reflecting the non-sitting IGR at Raymond Mhlaba inthe quarter under review due to amalgamation

KPI55

GGP3/1

No. of programsfor designatedgroupscapacitated onsocio politicalissues as perSpecial ProgramsStrategy

Conduct 2 Capacitybuilding programs forOlder persons andpeople with Disabilityin 2 LM's

Quarterly report on 9 capacity buildingprograms conducted, attendance registersfor capacity building for women held inAmahlathi LM dated 20/10/16, capacitybuilding and launch of children’s rightsadvisory held in Amahlathi LM dated21/10/16, capacity building for olderpersons held at Raymond Mhlaba LM dated26/10/16, Mnquma LM dated 31/10/16,Amahlathi LM dated 11/11/16, capacitybuilding program for people with disabilityheld at Amahlathi LM dated 22/11/16, onbusiness skills dated 25/11/16, 16 days ofactivism on No violence against women andchildren at Mnquma LM dated 25/11/16 andChristmas for elderly at Great kei LM dated12/12/16 are provided

Quarterly report on special programmes capacitybuilding conducted, attendance registers forCapacity building for women held at Mnquma LMdated 20/08/16, capacity building held at RaymondMhlaba LM dated 23/09/16, women empowermentprogram held at Ngqushwa LM dated 08/09/16,women’s national coalition new national skillsdevelopment strategy and constituency capacitybuilding workshop dated 23&24/09/16 are provided

KPI56

GGP4/1

No of reports onDistrict supportsubmitted to theEMC

1 Quarterly municipalsupport reportsubmitted to EMC

Quarterly report on municipal supportprovided to the local municipalities togetherwith EMC agenda dated 07/12/16 areprovided

Signed quarterly report on support provided by linedepartments together with agenda for EMC dated04/10/16 where the report was tabled are provided

KPI57

GGP5/1

Turnaround timefor responding tocomplaints

3 working days forregistering complaints,forwarded to relevantdepartments andacknowledgement toclients

Quarterly report on activities undertaken bycommunications unit, list of receivedqueries, acknowledgement and referralletters to the relevant departmentsreflecting 1 working day taken to registercomplaints & forwarded to relevantdepartments are provided

ADM Customer care complaints register,acknowledgement letters on queries receivedtogether with quarterly report reflecting the 24hrs ofregistering complaints, forwarding andacknowledging to clients receipt of the query


KPI58

GGP6/1

Turnaround timetaken to respondto Petitionsreceived fromcustomers

30 working days forresponding to Petitionsreceived from thecommunities

Quarterly report on petitions received, listof received queries for the quarter underreview (Oct-Dec) together with response tothe petition at hand are provided

Quarterly report on petitions received, list of queriesreceived together with letters of response areprovided.

KPI59

GGP6/2

No. of programsimplemented asper PublicParticipation andPetitionFramework Policy

Conduct roadshows onAnnual report and 1service deliverycampaigns

Quarterly report on 6 public participationprograms implemented, (1)attendanceregisters for service delivery campaign heldon the 18/10/16 at Mnquma LM, 6stakeholder meetings held at Mnquma LMdifferent wards (a) Msobomvu on10/10/16, (b) Mrhawuzeli on 11/10/16, (c)Teko Fihla on 11/10/16, (d) Msintsana on13/10/16 (e) Cilo Location on 13/10 (f)Holela on 19/10/16, (2)attendance registerson Annual Report Roadshows conducted inall 6 LMs dated 26-30/09/16

Report on mayoral outreach and service deliverycampaigns, attendance register for mayoral imbizoheld at Mnquma LM dated 29/07/16, mayoraloutreach held at Amahlathi LM dated 29/08/16,attendance register for water forum held atMbhashe LM dated 20/09/16 together withexpenditure report

LEGEND

PERFORMANCE SCORING COLOR CODINGNot ApplicableUnacceptable performance (1)Performance Not Fully Effective (2)Performance Fully Effective (3)Performance Above Expectation (4)Outstanding Performance (5)


GENERAL RECOMMENDATIONS BY THE MUNICIPAL MANAGER

a. That Departments re-align the Mid-year review to monthly projections of expenditure on the Operationaland Capital budget based on the Midyear assessed SDBIP’s

b. That the Mid-year budget and performance assessment report and the recommendations contained thereinbe noted for preparation of an Adjustment budget

c. That the revised SDBIP which formed the basis of the Mid-year assessment be noted, and departmentalSDBIPs be attached to performance agreements of section 56 employees accordingly

Projects ActivitiesQ1 Deliverable

TargetQ1 Progress Q2 Deliverable target Q2 Evidence Q2 Progress Reasons for deviation Annual Target Identified Risks Custodian

Alice Transport

Hub

1. Procurement of Contractor

2. Appointment of Contractor and

Site Establishment;

3.Practical Completion

Procurement Process

To revise the specifications

made previously with the

Project Manager inline with

what is available. To start

initiating the procurement

processes.

Clear progress of

activities as per the

scope of work

approved by the COO

Payment Certificates,

Minutes of Meetings ,

Photographs and Report

Not achieved

Application for rollover of

project funds was rejected

by National Treasury.

Practical Completion

of Alice Transport

Hub

Executive Manager:

Operations

Fundraising for

funding for

upgrading other

small towns

1. Lobby for funding for upgrading

of Peddie and Idutywa from the

Department of Rural Development

2. Lobby for funding to conduct

planning for the other small towns

within Amathole

3. Resume a procurement process

for appointing Principal Agents and

Contractors

1. At least 2 Business

Plans for Peddie and

Idutywa approved

Treasury and Rural

Development requests for

funding had been

submitted.

Signed Funding

AgreementFunding Agreement Not achieved

Funding applications were

declined. No extra funding

has been secured.

1. 2 Business Plans

for Peddie and

Idutywa approved by

the Department of

Rural Development

2. Approval granted

by the Department of

Rural Development

for planning funds for

other small towns

3. Tenders

advertised for Peddie

and Idutywa.

No FundingExecutive Manager:

Operations


TargetQ1 Progress Q2 Deliverable Target Q2 Evidence Q2 Progress Reasons for deviation Annual Target Identified Risks Custodian

Operationalisation

of Emthonjeni

Artist Retreat

1. Update the Operational Plan for

Emthonjeni Artist Retreat

2. Secure funding to

Operationalise EA from the ADM

3. Finalise the acquisition of assets

for the Liquidation of the section 21

1. Update the

Operational Plan and

Budget for EA

2. Sign the Deed of

Sale Agreement for

the EA Assets with

the Liquidator

1. Updated the Operational

Plan.

2. Signed Deed of Sale with

the liquidator is available.

3. Submission to fund new

operations to be made to

DEDEAT LRED Fund.

ASPIRE identifying a local

partner to qualify for funding

as LRED does not fund

government entities. Submit

HAR to Office of the

Premier and the

Department of Cooperative

Governance and

Traditional Affairs.

1. Develop TORs for an

Operator for the EA

Retreat

2. Advertise for an

Expression of Interest

3. Open doors and

resume partial

Operations of the EA

1. TORs and Advert

2. Quarterly Operational

Report for the EA

presented to EXCO

3. Operational Report of

EA submitted to ADM

Not achieved

The building has not been

transferred to the rightful

owner, who will then cede it

to Aspire for

operationalisation

1. Appointed

Operator

2. ASPIRE's Report

in implementing the

Council Resolution

1. ASPIRE does not

receive any response

on its Expression of

Interest from

competent companies

or interested parties.

2. EA Operational

Funds not being

transferred to ASPIRE

by ADM

Executive Manager:

Operations

Culture and Heritage Projects

Page 1 of 11



Fundraising for

Culture, Heritage

and Tourism

Promotion

Projects

1. Develop Funding Proposals for

Culture, Heritage and Tourism

Programme of ASPIRE

2. Identify a list of Culture and

Heritage Projects in each of the

ASPIRE 4 Corridors

3. Develop Business Plans and

Budgets for such projects

4. Submit such Business Plans for

Funding to different stakeholders

1. At least 3 funding

proposals submitted

to potential funders

1. Amathole Heritage

Routes and Gcaleka

Cultural Village to be

submitted to the

Department of Rural

Development and Agrarian

Reform (Rural Tourism

Section) and Department of

Cooperative Governance

and Traditional Affairs.

2. Follow-ups are continuing

with the Department of

Defence and Military

Veterans over Alice

Heritage Park, and

Department of Women,

Children and People with

Disabilities over the funding

of Annie Silinga Memorial

Garden.

1. A list of Culture,

Heritage and Tourism

Projects in each of the 4

Corridors presented to

EXCO

1. List of Projects

2.EXCO Minutes

List of projects has been

developed.n/a

1. At least 6 Funding

Proposals submitted

to Funders

2. A least 3 Business

Plans and Budget for

Heritage Projects

completed


Operations



Identification, induction,

contracting, and training of

beneficiaries

None

Project terminated and

handed back to the

Department of

Environmental Affairs.

Correspondence sent to

DEA regarding fulfilling

phase 1 requirements to

retain R765,000.00 that was

paid to ASPIRE.

None None n/a n/a100 beneficiaries

employed and trained

1. Political buy in from

the BCM

2. Community Protest

3. Nepotism

4. Aspire's Compliance

to Statutory

Requirements

Executive Manager:

Operations

1. Stakeholder Management

2. Procurement of goods and

services (protective clothing,

signage, etc)

3. Appoint Professionals to do

architectural designs for the Waste

Management Systems

4. Construction and Handover

1. Procurement of

tools, equipment,

protective clothing,

and signage;

2. Community liaison

and stakeholder

engagement;

3. Contracting and

Training of

Beneficiaries

Project terminated and

handed back to the

Department of

Environmental Affairs.

Correspondence sent to

DEA regarding fulfilling

phase 1 requirements to

retain R765,000.00 that was

paid to ASPIRE

1. Upgrade of waste

management facility

commences

1. Photos, site reports, n/a n/aUpgrade of waste

management system

1. Political buy in from

the BCM


3. Nepotism


to Statutory

Requirements

Executive Manager:

Operations

Special Projects

Waste

Management

Systems

Page 2 of 11



Recruitment and employment of

beneficiaries

1. Contract of

employment for

beneficiaries

1. 93 participants employed

2. 93 participants contracts

of employment were

extended for 5 months from

October 2016 until February

2017.

3. Expenditure was

R574,146.19 on wages.

1. 93 jobs maintained Time sheets Achieved - 93 beneficiaries n/a93 beneficiaries

employed

1. Political buy-in from

the BCM


3. Nepotism


to Statutory

Requirements

Executive Manager:

Operations

Clearing of illegal dumps.

Establishment of food gardens.

Awareness campaigns

Clearing and

removing of dirt.

Rehabilitating of the

identified sites.

Soil preparation.

Erection of fencing.

1. No participants trained.

2. Garden designs

approved by BCMM.

3. 25km of streets sweeping

& gutter clearing completed.

4. Dirt excavation done in

Ziphunzana & Zwelitsha

ward 41 .

5. Protective clothing

purchased & distributed to

participants.

6. No dumping signs

procured.

7. Participated in the

following cleaning

campaigns: - Coastal

cleaning campaign, Black

road cleaning campaign,

Arbor week coastal cleaning

campaign, Mandela day.

8. Assisted BCMM with

procurement of street

banners for keep BCMM

clean and go green

campaign.

9. Expenditure for these

activities is R375,388.94

Door to door

environmental

awareness campaigns

Progress report and

photos.Achieved. n/a

Clearing of illegal

dumps.

Establishment of

food gardens.

Awareness

campaigns

1. Political buy-in from

the BCM


3. Nepotism


to Statutory

Requirements

Executive Manager:

Operations

Employment and contracting of

contractors and beneficiaries

317 beneficiaries

employed

1. Project implemented in 4

areas, namely Diya,

Ngqamakhwe, Shixini, &

Qwaninga.

2. 13 invoices submitted to

the DEA for reporting.

3. 13 Contracts were

inspected & paid.

4. R705,519.49 expenditure

towards the 13 contracts

invoices.

5. 218 participants

employed.

0 Time sheets Not achieved

Funding for the project

came to an end in August

2016. Aspire is awaiting

funding from the

Department of

Environmental Affairs

317 beneficiaries

1. Buy-in form

Traditional Authority.

2. Delayed transfer of

drawdowns

3. Cost implications to

Aspire.

4. Timeous response of

the DEA to project

queries.

Executive Manager:

Operations

Adopt -A-Spot

Natural Resource

Management (NRM)

Page 3 of 11



Clearing alien invasive plants on

2075 ha from 4 projects in Diya,

Shixini, Qwaninga, and

Ngqamakhwe.

470 ha's of land

cleared 187.16 Ha 's of land cleared 470 ha's of land cleared

Quarterly reports,

inspection reports,

expenditure report

Not achieved

Funding for the project

came to an end in August

2016. Aspire is awaiting

funding from the

Department of

Environmental Affairs

1422 ha's of land

cleared

1. Buy-in form

Traditional Authority.

2. Delayed transfer of

drawdowns.

3. Cost implications to

Aspire.

4. Timeous response of

the DEA to project

queries.

Executive Manager:

Operations



Business Plans for

Honey and Aloe

Processing

projects at

Amathole DM.

1. Collate available information on

Honey and Aloe Potential in

Amathole.

2. Identification of suitable sites.

3. Finalise the Terms of Reference

with the CSIR and NAMC.

4. Enter into a contract agreement

with special conditions of contract.

5. Consider compliance in respect

to statutory documents needed for

honey and aloe processing.

6. Provide consultative support to

planning initiatives.

7.Coordinate development of a

strategic business plans to reflect

technical Implementation Plan and

Budget imperatives.

8. Submission of completed

business plan.

1. Collate available

information on

Honey and Aloe

Potential in

Amathole.

2. Identification of

suitable sites and

formalise communal

land use agreements.

3. Leverage and

allocate funds for the

development of

business plans.

1. Site has been identified

at Tyefu.

2. A proposal has been

presented by CSIR to

ASPIRE.

3. NAMC to give an up-date

before 29/09/2016.

1. Finalise the Terms of

Reference with the

CSIR and NAMC.

2. Enter into a contract

agreement with special

conditions of contract.

1. Approved Terms of

Reference.

2. Signed contract

agreements.

Not achievedThere is no budget to

implement this project

Submission of final

business plans for

honey and aloe

1. Time limitation Executive Manager:

Operations

Fundraising for

Agriculture

Projects

1. Identify a list of Agriculture

Projects in each of the ASPIRE 4

Corridors

2. Develop Business Plans and

Budgets for such projects

3. Submit such Business Plans for

Funding to different potential

funders.

1. At least 3 funding

proposals submitted

to potential funders

1. Discussions between

ASPIRE and DRDLR are on-

going for the release of R14

million.

2. A request for previous

invoices has been

submitted to ATS and some

have been submitted.

3. A meeting between

ASPIRE, DRDLR and DTI

will sit at the earliest

convenience of DTI.

4. Farmer training proposal

has been submitted to NSF.

1. A list of Agriculture

Projects in each of the 4

Corridors presented to

EXCO

1. List of Projects

2.EXCO Minutes

List of projects has been

developed.n/a

1. At least 6 Funding

Proposals submitted

to Funders

2. A least 3 Business

Plans and Budget for

Agriculture Projects

completed


Operations

Agriculture and Rural Development Projects

Corporate Services

Natural Resource

Management (NRM)

Page 4 of 11




targetQ1 Progress Q2 Deliverable target Q2 Evidence Q2 Progress Reasons for deviation Annual Target Identified Risks Custodian

Implementation of

Employment

Equity Plan

1. Conduct workplace analysis

2. Update EE Plan with targets

3. Submit EEA 2&4 report annually

by 15 Jan

1. Review EE plan

EE forum meeting held on

16 September 2016 where

progress on EE Plan was

reviewed.

1. EE quarterly meeting

held

2. Report on progress

EEA4 and EEA2

1. Minutes of quarterly

forum meeting

2. EEA4 and EEA2 report

3. EE Quarterly Meeting

held

1. Achieved

2. Achieved

3. Not achieved

Quarterly meeting not held

as no quorum - new

members to be nominated

by staff in Q3

1. EE Plan

2. A total 3 Forum

meetings

3. Submitted EEA2

and EEA4

Non Compliance with

EE Act.

Executive Manager:

Corporate Services

Implementation of

the Occupational

Health and Safety

Policy

1. Appoint H&S reps

2. Develop H&S process flow map

and standard operating procedures

manual

3. Conduct Workplace H&S

Assessment

4. Develop emergency procedures

and drills

1. Appointed H&S

reps

2. Workplace H&S

assessment

1. S16(2) appointed

2. Draft Evacuation plan

developed

Developed H&S process

flow map and standard

operating procedures

manual

H&S Process flow and

SOP Achieved n/a

1. Appointment of

reps

2. Process flow and

SOP

3. Emergency

procedures manual

4. Evacuation drill

Non Compliance with

OHS Act.

Executive Manager:

Corporate Services

1. Transfer ASPIRE from Services

Seta to LGSeta

2. Develop a WSP

3. Submit plan to LGSeta

Transfer of ASPIRE

from Services Seta to

LG Seta completed

Transfer to LGSeta has

been delayed at SARS.

Forms have been

completed and submitted.

1. Workplace Skills Plan

Developed

1.Workplace Skills Plan

document, Not achieved

The Workplace Skills Plan is

dependent on the areas of

training required which are

identified during

performance contracting.

As performance contracting

has not been conducted, a

WSP cannot be developed.

1. Workplace Skills

Plan,

2. Transfer to LG

Seta completed,

3. Confirmation of

the WSP Budget,

1. Inability to retain

staff within ASPIRE,

2. Non compliance

with the Skills Plan

Audit

3. Inability to have

competent staff

Executive Manager:

Corporate Services

1. A total of 8 Staff members

trained on QMS Module 1

2. Conduct EE Training for the EE

Forum and the staff

3. Conduct Health &Safety

Training for the rep and staff

4. Recommendations of the Skills

Audit Report implemented

5. A total of 2 staff trained as First

Aiders within ASPIRE

6. A total of 3 Managers trained in

Project Management

1. EE Training for the

Forum and staff

conducted

2. Health & Safety

Rep and staff trained

1. EE Training delayed as

Dept of Labour only

available in November

2016.

2. Health and Safety

training to be initiated in

quarter 3.

1. Staff and Forum

Training Report on EE

and attendance

register,

2. Training Report for

the Health and Safety

Rep.

1. Skills Audit

Implementation Contract

2. Staff training report

on Health and Safety and

attendance register

1. Not achieved

2. Not Achieved

1. Dept of Labour only

available for training of

staff in Q3

2. No budget due to

decreased funding from

ADM

1. Skills Audit

Recommendations

Implemented,

2. QMS ISO 9001

Module Training for 8

ASPIRE employees

conducted,

3. Project

Management Training

for 3 ASPIRE

employees

conducted

4. Staff trained on EE

and H&s

Poor attendanceExecutive Manager:

Corporate Services

Implementation of

the Workplace

Skills Plan

Page 5 of 11



Conduct an Annual

Review and

Development of

new HR Policies

1.Gap analysis of each policy and

advise staff through internal

communication

2. Conduct a review of all

identified policies

3. Obtain input from staff on the

reviewed polices

4. Document all inputs for

recordkeeping purposes

5. Submit and present

recommendations and changes in

all policies to EXCO for approval,

after obtaining staff input

6. Prepare submissions to the

Board of all HR policies for final

approval

1. To review at least

3 policies for

submission to EXCO

2. To submit the 3

policies to the Board

for final approval

1. The following policies

have been reviewed and

will be submitted to the

Board :

* Employment Equity Policy

* Occupational Health and

Safety Policy

* Remuneration Policy

* Recruitment, Selection

and Placement Policy

* Cellphone, Data Card and

Landline Telephone Policy

1. To review at least 5

policies for submission

to EXCO

2. To submit the 5

policies to the Board

for final approval

1. 5 Reviewed HR

Policies.

2. EXCO Minutes

3. Board Minutes

1. The following policies

were approved by the

Board :

* Employment Equity Policy

* Occupational Health and

Safety Policy

* Remuneration Policy

* Recruitment, Selection

and Placement Policy

* Cellphone, Data Card and

Landline Telephone Policy

n/a

1. All 18 HR policies

reviewed and

approved both EXCO

and Board

2. New HR Policies

developed, where

applicable

non participation and

quality of input from

employees

Executive Manager:

Corporate Services

1. Facilitate 4 organisational

performance assessment

2. Verify Portfolio of evidence

against the APP for all Quarters

3. Develop a Quarterly

Performance Report and track the

gaps

4. Present the Performance

Reports to EXCO for approval

5. Conduct a mid year

performance assessment.

Q1 2016/17

Performance Report

1. Q1 performance

assessment of APP

conducted

2. Q7 organisational report

prepared

2016/17 Mid-year

Performance

Assessment report

1. ASPIRE's Performance

Assessment Report for

Q2

2. Minutes of EXCO

meetings.

3. MFMA sec 72 Mid-year

performance assessment

report.

Not achieved

Achievement of this target

is only feasible in Q3.

Target will be adjusted as

part of budget adjustment

process.

1. Four

Organisational

performance

assessment reports

against the APP.

2. 1 mid-year

assessment report in

terms of section 72

of the MFMA

1. Inability to fully

implement the APP and

gather evidence

2. Not being prepared

for the AG audit.

Executive Manager:

Corporate Services

1. Conduct 4 departmental

performance assessments

2. Moderation of performance

scores by the Moderation

Committees

3. Compilation of report from the

Moderation Committees

4. Approval of moderation reports

by the Board

Q4 Organisational

Performance

Assessment report

2014/15

1. Departmental

performance assessment of

APP for Corporate Services

Department conducted

2. Corporate Services Q1

report drafted

Q1 Organisational

Performance

Assessment report

1. Organisational

Performance Assessment

Report for Q1

2. Departmental APP

Achieved n/a

Organisational

Performance

assessment reports

Delayed performance

reviews

Executive Manager:

Corporate Services

Coordinate

performance

reporting,

monitoring and

evaluation

Page 6 of 11



1. Facilitate Development of

Performance Contracts for all

staff, linked to the APP

2. Facilitate individual

performance assessments for all

staff at ASPIRE, every Quarter

Individual

performance

appraisals conducted

for all staff in

department for Q1

2016/2017

1. Performance agreement

template has been drafted

2. Performance Agreement

to be signed by all staff by

end of Q2 based on APP and

Executive Manager's APP's

Individual performance

appraisals conducted

for all staff in

department for Q2

2015/2016

1. Copy of Individual

Performance appraisal

2. Performance

agreement

Not achieved

Performance agreements

have not been negotiated

and signed by staff

4 Departmental

individual

performance

evaluation reports

Executive Manager: :

Corporate Services

1. Compilation of the Annual

Report with EXCO

2. Approval of Draft Annual Report

by EXCO and Board

3. Submission of the approved

Draft Annual Report to ADM by

end August 2015

4. Appointment of service provider

to design and print the Final

Annual Report

5. Approval of the Final Annual

Financial Statements and Annual

Report by Board

6.Submission of Final Annual

Report to ADM by end December

2015

1. Draft 2015/16

Unaudited Annual

Report submitted to

Board for approval

2. Annual

Performance Report

and Annual Financial

Statements

submitted to ADM

and the Auditor

General by end

August 2015

1. Draft Unaudited annual

report submitted to Board

and approved.

2. Annual Report and AFS

submitted to ADM and AG

by end August 2016

1. Appointment of

service provider for

design and printing of

annual report

2. Finalisation of layout

and design of annual

report

3. Approval of final AFS

and annual report by

Board

4. Submission of final

annual report to ADM

by end of Dec 2015

1. Signed appointment

letter of service provider

2. Minutes of board

meeting

3. Proof of submission

Not achieved

No budget has delayed

design and printing of

annual report until budget

adjustment received from

ADM

1. ASPIRE's

2016/2017 Annual

Report

2. 2017/18 Annual

report plan

Funding Executive Manager:

Corporate Services

Implementation of

Communication

Strategy

1. Submit Communications,

Marketing and Reputation

Management Strategy to Board for

approval

1. Submit

Communications,

Marketing and

Reputation

Management Strategy

to Board for approval

Strategy developed.

Strategy to be submitted to

the December 2016 Board

meeting.

n/a n/a n/a n/a

Approved

Communications

Strategy document

Funding Executive Manager:

Corporate Services



Governance

Documents and

Effectiveness of

the Board

1. Organise and host an AGM

2. Audit File

3. Draft Annual Governance

Section for the Annual Report

External Audit File Achieved

Draft Governance

Chapter and CS's

Report for Annual

Report

Published Annual Report

with Governance Charter

and CS's Report

Achieved n/a

1. External Audit File

2. Governance

Chapter and CS's

Report in the Annual

Report

3. AGM

4. Board and

Committee Calendar

Company Secretary

Governance, Board Support and Legal Services

Coordinate

performance

reporting,

monitoring and

evaluation

Page 7 of 11



Review Board

Charters, Board

Committee

Charters or Terms

of Reference and

Board Policies

1. Review all Board Charters,

where applicable;

2. Review Board Committee

charters/TOR

3. Review Board Policies

1. Policy Register

revised

2. Reviewed Board

Committee Charters

Achieved, All Charters have

been revised and approved

by the Board

Committee Charters

Reviewed

Approved Committee

Charters Achieved n/a

1. Aspire Policy

Register;

2. Review the Board

Charter;

3. Review all

Committee Charters

and Terms of

Reference

Company Secretary

Incorporate

ASPIRE in terms

of the Companies

Act 2008

1. Lodge the MoI with the

Companies Intellectual Property

Commission

Board Approval of the

MoI

Not Achieved not completed

for Q1 / Draft to be

submitted in December

Board meeting

Draft MoI presented to

the ADMApproved MoI by ADM Not achieved

MoI has been submitted to

the Board for approval.

ASPIRE Incorporated

in terms of the 2008

Companies Act

Company Secretary

Coordinate

functioning of

Board oversight

structures

1. Facilitate sitting of Board

meetings quarterly, or as when

required

2. Facilitate sitting of Board

Committee Meetings as per the

schedule;

3. Draft minutes and Resolutions

Quarterly board and

committee meetings

Not all scheduled meetings

took place as planned due

to the ARC meeting

preparations. SEC and

Finance Committees did not

sit

Quarterly board and

committee meetings

Signed Quarterly Board

and Committee Minutes Achieved n/a

4 Scheduled Board

and Committee

meetings and special

meetings as and

when required

Company Secretary

Ensure

compliance with

Key Legislations

(Companies Act,

MFMA and

MSA)and Board

and Committee

Charters

1. Compiling a Compliance

Checklist for all the relevant

legislations;

2. Performing legal compliance

audits for all the legislations, Board

and Committee Charters

3. Provide legal and governance

advice to the Board and individual

directors

1. Compliance

Checklist

2. Q1 Compliance

Audit Report to the

Board

Not achieved, No response

from EXCO members

Conduct Q2

Compliance Audit

Q2 Compliance Report to

the Board Not achieved Capacity constraints

3 Primary legislation

Compliance Audit

Conducted and

monitored on an

annual basis

Lack of personnel to

conduct the required

legal compliance audits

Company Secretary

Legal Advice to

Aspire

1. Interact with Operations and

Corporate Service on partnerships

Aspire is getting into;

2. Review partnership proposal in

order to develop terms of

engagements favourable to Aspire;

3. Draft and or Review Partnership

Agreements;

4. Provide Legal Advice to protect

the interest of Aspire

None Lease AgreementAt least 1 Agreement

Reviewed Signed Agreement Achieved. n/a

A minimum of 3

Agreements signed

and legal advise

provided by the

Company Secretary

Company Secretary


targetQ1 Progress Q2 Deliverable target Q2 Evidence Q2 Progress Reasons for deviation Annual Target Identified Risks Custodian

Finance and Supply Chain

Page 8 of 11



Submission of

Section 87

Reports to ADM

1. Develop an Annual Budget for

ASPIRE to cover both Project

Funds and Administration Funds

2. Develop and submit S87 report

monthly to the ADM

3. Prepare Monthly Management

Accounts for discussion at EXCO

4. Manage funds efficiently from

the ADM and other funders

1. Monthly Financial

Report and

Management

Accounts submitted

and approved at

EXCO

2. Quarterly Financial

Report submitted to

the Board

3. Section 87

reporting submitted

within 10 working

days after the end of

the month to the ADM

1. Despite the July backlog,

monthly reports for July-Sep

have been submitted both

the EXCO, ADM and

National Treasury.

2. Quarterly report to be

tabled to the Board in

December.

3. Monthly signed S87

reports submitted to the

ADM via e-mail.


Report and

Management Accounts

submitted and approved

at EXCO


Report submitted to the

Board

3. Section 87 reporting

submitted within 10

working days after the

end of the month to the

ADM


Report and Management

Accounts submitted and

approved at EXCO -

EXCO Minutes


Report submitted to the

Board - Board Minutes

3. Section 87 reporting

submitted within 10

working days after the

end of the month to the

ADM- signed / stamped

proof of submission

1. Achieved

2. Achieved

3. Achieved

n/a

1. EXCO approves all

Monthly Management

Accounts

2. Board approves all

Financial Reports

3. Section 87 Reports

are submitted to

ADM

Underfunding for both

projects and

administration

Executive Manager:

Finance

Improvement of

Aspire's Working

Capital

1. Capturing all invoices on the

date of receipt

2. Process all invoices within 30

days of receipt

3. Record and report to EXCO on a

monthly basis on this activity

100% of Invoices

paid within 30 days of

receipt

Processing of invoices is

done on 15th and 30th each

month. An invoice register

has will be developed

effective from 01 October.

100% of Invoices paid

within 30 days of receipt

1. Report of all invoices

received and time it took

to pay them

2. EXCO Minutes

Not achieved

November invoices not paid

within 30 days due to

cashflow problems

100% payment of

received invoices

paid within 30 days

Late submission of

invoices by

departments

Executive Manager:

Finance

1.Reduce and

Manage

Deviations

2.Implement

reviewed SCM

systems and

procedures to

address issues

causing deviations

1. Develop a procurement plan

2. Implement reviewed SCM

systems and procedures to

address issues causing deviations

3. Monitor the implementation of

the procurement plan

1. Reduction in

number of deviations

by 0,5 %

2. Submission of the

report to the Board

No new deviations for the

1st quarter ending

September 2016.

1. Reduction in number

of deviations by 0,5 %


report to the Board

1.Monthly deviations

report

2. Proof of submission

Quarterly deviation report

to the Board

1. Achieved

2. Achieved

n/a

Reduce number of

deviations by at least

2%

Violation of SCM policyExecutive Manager:

Finance

Annual Financial

Statements

Development of Annual Financial

Statements

Compile AFS and

submit to AG and

ADM

Achieved

1.Item to Board ratifying

the 2014/15 AFS that

were submitted to the

AG and ADM

2.Quarterly financial

management

statements

1. Copy of the item to

Board ratifying the

2013/14 AFS- Board

minutes.

2.Financial statements

reviewed by the

Accounting and

Reporting

1. Achieved

2. Achieved

n/a

16/17 Annual

Financial Statements

submitted to Auditor-

General and ADM

Non compliance with

GRAP and MFMA

Executive Manager:

Finance

Page 9 of 11



Conduct an

Annual Review

and Development

of new Finance

Policies

1. Identify policy gaps and

communicate to staff

2. Conduct a review of all identified

policies

3. Obtain input from staff on the

reviewed polices,

4. Document all inputs for

recordkeeping purposes.

5. Submit and present

recommendations and changes in

all policies to EXCO for approval,

after obtaining staff input

6. Prepare submissions to the

Board of all Finance policies for

final approval

n/a

1. To review 2 policies

for submission to EXCO

2. To submit the 2

policies to the Board for

final approval

1. 2 Reviewed Finance

Policies.

2. EXCO Minutes

3. Board Minutes

1. Achieved

2. Achieved

n/a

1. All 8 Finance

policies reviewed

and approved both

EXCO and Board

2. New Finance

Policies developed,

where applicable

Executive Manager:

Finance

Monitoring and

reporting on

contractual

commitments and

performance of

service providers

1. Ensure staff is trained on SCM

and the respective Committees

2. Develop a clear procurement

plan and time frames

3. Reporting on contractual

commitments

4. Report on the performance of

service providers

1. Annual

procurement plan

submitted to EXCO

for approval

2. Monthly

Procurement reports

submitted to EXCO

3. Quarterly

procurement reports

approved by the

Board

4.A Report submitted

to Board on

contractual

commitments and

performance of

service providers

1. Only the procurement

plan for Adopt a Spot has

been received.

2. Procurement report is

tabled quarterly in line with

S87 of the MFMA.

1. Monthly Procurement

reports submitted to

EXCO

2. A Report submitted to

Board on contractual

commitments and

performance of service

providers

1. Monthly Procurement

Reports

2. EXCO Minutes

3. Board Submission

1. Achieved

2. Not Achieved

3. Achieved

2. Monthly Exco not held

4 Reports submitted

to Board on

contractual

commitments and

performance of

service providers

Aspire not adhering to

its SCM Policy

Executive Manager:

Finance

Implementation of

Internal Audit

management

action plans

1. Develop and report on the

Dashboard

2. Develop a Plan of Action in

managing Auditor General's

findings

3. Conduct Quarterly Audits as per

approved plan

4. Submit Audit Reports to the

Audit Committee and the Board

1. Audit Plan

developed

2. At least 50% of

management

responses on some

AG's findings

provided

3. Q1 Internal Audit

Report completed


Internal Audit Reports

to both the Audit

Committee and Board

1.Audit Plan presented by

ADM internal Audit Unit.

2. No audit was performed

for Q1 2016

3. No Audit performed for

Q1.

4. N/A

1. A total of 100% of

management responses

on AG's findings

provided


Report completed

3. Submissions to the

Audit Committee and

the Board

1. Management

Responses (100%)


Report

3. Audit Committee and

Board Minutes and

Submissions

1. Achieved

2. Not achieved

3. Achieved

2. Internal audit is busy

conducting a internal

governance audit.

1. A total of 4 Internal

Audits

2. Audit Committee

and Board Consulted

fully

3. Management

responses on AG's

findings

Adverse findings by the

AG

Executive Manager:

Finance

Page 10 of 11



Implementation of

the Risk Master

Plan

1. Develop a Risk Matrix through a

Consultative process with staff

2. Monitor the Risk Matrix on a

Quarterly basis

3. Report to the Board on a

quarterly basis

1. Q1 Risk Matrix

Progress discussed

at EXCO

2. Risk Matrix

approved by the

Board

Q1 risk register report

updated and discussed at

Exco meeting.

1. Q2 Risk Matrix

Progress discussed at

EXCO

2. The report is

submitted for noting and

discussion by the Board

1. Q2 Risk Report

2. Board Submission

1. Achieved

2. Not yet submitted to

Board

2. Risk report still awaits

submission to BoardInadequate funding

Executive Manager:

Finance

Implementation of

Standard Chart of

Accounts (SCOA)

1. Appoint a service provider to

assist Aspire with SCOA;

2. Develop an implementation plan

for Aspire;

3. Implement the SCOA software

within Aspire;

4. Train Finance Staff on how to

use the system and also comply

with the regulations

Implementation plan

Initial meeting held with

ADM in September. Still

await a roll-out plan for both

SAP and mSCOA in line

with Council resolution of

January 2016 to include

ASPIRE. Little or no

progress to date.

Implementation of

mSCOAProgress report to Exco Not achieved

Despite ADM council

resolution on financing

Aspire, ADM have

confirmed that they do not

have budget available.

1. SCOA Regulations

Compliance;

2. SCOA Training of

Aspire Staff

1. Lack of personnel to

conduct the required

legal compliance audits

Executive Manager:

Finance

Asset

Management and

Tracking

Monitoring and management of

ASPIRE assets

Conduct a quarterly

asset verification

count and reconcile

to the asset register

1. No new assets

acquisitions for the quarter

ending September.

2. Assets verification

performed on 27-28

October.

Conduct a quarterly

asset verification count

and reconcile to the

asset register

1. Quarterly report on

the asset verification

count

2. Copy of the updated

fixed asset register

Achieved n/a

100% updated fixed

asset register with all

tagged/bar coded

assets reconciled to

the fixed asset

register and the GL

Unidentified assetsExecutive Manager:

Finance

Page 11 of 11

ANNEXURE D - ASPIRE MID-YEAR PERFORMANCE REPORTANNEXURE D - ASPIRE MID-YEAR PERFORMANCE REPORTANNEXURE D - ASPIRE MID-YEAR PERFORMANCE REPORT

ANNEXURE D - ASPIRE MID-YEAR PERFORMANCE REPORT



ANNEXURE D - ASPIRE MID-YEAR PERFORMANCE REPORTANNEXURE D - ASPIRE MID-YEAR PERFORMANCE REPORTANNEXURE D - ASPIRE MID-YEAR PERFORMANCE REPORT

AMATHOLE DISTRICT · based on accrued revenue. Billing is slightly more than anticipated, however...

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Transcript of AMATHOLE DISTRICT · based on accrued revenue. Billing is slightly more than anticipated, however...