umhlosinga development agency assessment umda 2016 (1).pdf · staff workshop conducted to review...

Chairperson: Mr. Russel Tembe, Deputy Chairperson: Mr. Sibusiso Gumbi, Mr. Mfundo Thango, Mr. Zwelisha Ndwandwe, Mr. Sipho Nyawo

Chief Executive Officer: Mr. Mandla Ntuli

www.umda.org.za

Umhlosinga Development

Agency

308 Ebony Crescent Mtubatuba

3935

P O Box 367 St Lucia, 3936

Tel: 035 550 3080 Fax 035 550 3088

UMkhanyakude District Municipality

Harlingen No. 13433

Kingfisher Road Mkuze

KwaZulu-Natal

P O Box 449 Mkuze

3965

Tel: 035 573 8600 Fax: 035 573 1094

UMHLOSINGA DEVELOPMENT AGENCY

MID YEAR BUDGET AND

PERFOMANCE ASSESSMENT

2015/16

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1. Purpose

The purpose of this report is to inform the Board of directors, on the mid-year budget

and performance assessment for the Agency as at 01 January 2016.

2. Legislative framework Municipal Finance Management Act 56 of 2003, section 88 requires:

(1)The accounting officer of a municipal entity must by 20 January of each year—

(a) assess the performance of the entity during the first half of the financial year,

taking into account—

(i) the monthly statements referred to in section 87 for the first half of the

financial year and the targets set in the service delivery, business plan or other

agreement with the entity’s parent municipality; and

(ii) the entity’s annual report for the past year, and progress on resolving

problems identified in the annual report; and

(b) submit a report on such assessment to—

(i) the board of directors of the entity; and

(ii) the parent municipality of the entity.

(2) A report referred to in subsection (1) must be made public.

For the purpose of this report, the operating budget, the service delivery and budget

implementation plan, the annual report, the monthly statements in terms of section 87 of the

MFMA and the actual performance in terms of the operating budget for the first six months

of the financial year have been used for the assessment.

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3. DISCUSSION

REVENUE

For the first six months of the 2015/2016 financial year the performance of the actual

revenue measured against the pro-rata budgeted revenue can be summarized as

follows:

Audited AFS Total Budget Pro rata Actual Deviation

2014/15 '2015/2016 Budget 31 Dec 2015 Deviation

Capex Income

Dept. Of Education 8,318,418 22,272,617 11,136,308.50 7,679,887 3,456,421

COGTA - 4,320,000 2,160,000 - 2,160,000

8,318,418 26,592,617 13,296,309 7,679,887 5,616,421

Operating Income

Dept. Of Education 831,842 2,474,735 1,237,368 853,321 384,047

COGTA 48,000 432,000 216,000 216,000 -

Umkhanyakude DM 3,645,779 3,000,000 1,500,000 1,500,000 -

4,525,621 5,906,735 2,953,368 2,569,321 384,047

Other Income

Airport Fees 43,769 34,183 17,091.69 101,690 (84,599)

Interest on Investment 50,112 73,670 36,835.13 24,164 12,671

Other Income - - - 24,433 (24,433)

Tender Monies 34,386 20,000 10,000.00 6,053 3,947

128,267 127,854 63,927 156,340 (92,413)

Total Income 12,972,305 32,627,206 16,313,603 10,405,548 5,908,055

The agency has projected to receive a total budget of R32 627 206 for the year 2015/16, based on the mid-year assessment, the Agency has secured R10 405 548 for the first six months that indicate a short fall of R5 908 055 against the total budget.

The shortfall was caused mainly by the following reasons:

The schools nutrition programme could not achieve 100% in terms of delivery therefore the claims were submitted based on the number deliveries done. As the programme need to be funded in advance it was difficult to fund it from our co-funds since the district could not fund us on time.

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The small town rehabilitation project were delayed by the department especially with the issue of the land for Ndumo and the other two projected has already started it just that they have not claimed as yet on the project.

Some of the of achievements

The agency has able to raise more funds on airport fees and some refunds on insurance.

EXPENDITURE

For the first six months of the 2015/16 financial year the performance of the actual expenditure compared with the pro-rata budget can be summarized as follows

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Audited AFS Total Budget Pro rata Actual Deviation

Operating Expenditure 2014/15 '2015/2016 Budget 31 Dec 2015 Deviation

Employee costs 4,481,948 4,979,075 2,489,538 2,523,766 (34,229)

Board of Directors 356,291 110,000 55,000 61,147 (6,147)

Security 201,869 7,200 3,600 950 2,650

Bank charges 12,151 77,760 38,880 8,775 30,105

Insurances 35,734 45,360 22,680 15,672 7,008

Internet and website 5,526 23,489 11,745 6,919 4,826

Machine rentals 58,022 65,495 32,747 31,451 1,297

Telephone and telefax 18,659 35,000 17,500 10,282 7,218

Printing and Stationery 24,908 19,440 9,720 8,428 1,292

Computer expenses (IT Support) 35,000 17,500 3,216 14,284

Internal audit - 112,916 56,458 171,200 (114,742)

Travel expense - 146,000 73,000 122,671 (49,671)

Auditors general fees 601,079 250,000 125,000 9,254 115,747

5,796,186 5,906,735 2,953,367 2,973,730 (20,362)

Capex Expenditure

Cogta Grants (Small town rehabilitation)364,499 4,320,000 2,160,000 - 2,160,000

NSN Programme 8,014,245 22,272,617 11,136,309 7,678,017 3,458,291

8,378,744 26,592,617 13,296,309 7,678,017 5,618,291

Not budgeted Expences

Audit committtee expense - 55,899 (55,899)

Accomodation and car rentals 285,855 60,405 (60,405)

Accounting fees 37,104 4,631 (4,631)

Advertising 33,781 400 (400)

Interest Paid 135,315 14,788 (14,788)

Cleaning Material 4,961 1,461 (1,461)

Airport Establishment 1,215,657 47,000 (47,000)

Conference Workshop & Seminar Attendanc306,812 3,422 (3,422)

Depreciation on fixed assets 172,201 - -

Repairs and maintenance 48,046 1,685 (1,685)

2,239,731 - 189,691 (189,691)

Total expenditure 16,414,661 32,499,352 16,249,676 10,841,438 5,408,238

Operating expense overspending was caused mainly by the following reasons:

Due to the fact that the parent municipality budget was not approved by treasury, the

budget has to be cut and all adjustment has to make on all expenditure while the

agency has already incurred expense.

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All other expenses needed to be cut since the agency could not get enough cash

flow to operate from parent municipality. The total of R189 691 still to be provided on

the adjustment budget.

The is also R441 000 due to auditor general which is not recorded above as the

agency has dispute as this figure is above signed engagement letter while we still

await explanation.

All capital projects were underachieving due to the following reason:

The schools nutrition programme could not achieve 100% in terms of delivery

therefore the claims were submitted based on the number deliveries done. As the

programme need to be funded in advance it was difficult to fund it from our co-

funds since the district could not fund us on time.

The small town rehabilitation project were delayed by the department especially

with the issue of the land for Ndumo and the other two projected has already

started it just that they have not claimed as yet on the project.

Linkages between the budget, the IDP and political priorities

Firstly, the budget timetable and the IDP process plan are aligned through an integrated

time schedule.

Secondly, the IDP is prepared and the projects are included in the budget with each project

properly reference per IDP reference number.

Moreover, the financial plan comprising the total budget, among other items, is included in

the IDP.

Finally, the implementation of electricity and solid waste projects and other assigned

functions through the structures Act constitutes compliance with National, Provincial and

Local development goals to eradicate backlogs of the past.

IDP Strategic Objectives

UMkhanyakude District Municipality, in its progress of aligning the District Growth and

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Development Plan (DGDP) and the delivery priorities which were adopted by the

Council for the 2015/2016 Integrated Development Plan (IDP) which are as follows:

1. Water

2. Sanitation/Sewerage

3. Environmental health

4. Economic, Social or Community and Skills Development

5. Poverty eradication and Food Security

6. Revenue enhancement

7. Spatial planning and development

8. Communication and Information Technology (IT); and

9. Good Governance and Clean Administration

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4. Performance Management Report

The Mid-term Organizational Scorecard report is as follows:

KPA KPI TARGET ACTUAL

PERFORMANCE RATE

REASONS FOR

DEVIATION ACTION PLAN

GO

OD

GO

VE

RN

AN

CE

Compliance

Checklist

reviewed by the

Audit Committee

and adopted by

the Board

Compliance Checklist

updated by Dec 2015

Compliance

Checklist

updated 2

Partly

Achieved

Needed support from

Internal Auditors

SCM process for

appointment initiated

Internal Auditors to

appointed by Quarter

3

Organisational

policies reviewed

and approved by

Board

2 policies reviewed by

UMDA and approved

by Board by Dec 2015

2 policies

reviewed 2

Partly

Achieved

Staff workshop

conducted to review

policy

Policies to be

submitted Board for

adoption in Feb.

2016

Shareholder

Compact and

Annual

Performance

Targets signed by

the UMDA’s

Chairperson and

Parent

Municipality’s

Mayor

Shareholder Compact

and 2015/16

Performance Targets

signed by Sept. 2015

Shareholder

Compact and

2015/16

Performance

Targets not

signed 1

Not

Achieved

Meeting held between

EXCO and Board

resulted in a need to

review the UMDA’s

mandate; financial

support and

performance targets.

The resolution of the

above motioned

meeting lead to

deviation.

Committee has been

set by the UKDM

which comprises of

Executive and senior

management of both

the UMDA and

UKDM

Recommendations

which will be made

by the committee will

have a direct impact

on the target.

Quarterly

Performance

Reports submitted

to UKDM

Quarterly performance

report submitted by

Dec. 2015

Quarterly

performance

report submitted

3

Achieved

None Not Applicable

Quarterly Board

meetings

Quarterly Board

meeting to consider

Quarter 1 performance

by Dec. 2015

Board meeting

not held 1

Not

Achieved

Quorum was reached

which lead to the

deviation

Meeting has been

scheduled for the

19th of January 2015

and quorum to

constitute a meeting

was reached

Quarterly Audit

Committee

meetings

Quarterly A.C meeting

to consider Quarter

performance by Dec

2015

A.C meeting not

held 1

Not

Achieved

Quorum was reached

which lead to the

deviation

Meeting has been

scheduled for the

19th of January 2015

and quorum to

constitute a meeting

was reached

Development and

implementation of

a Communication

Strategy

Approved

Communication

Strategy by Sep. 2015

Communication

Strategy in place 3

Achieved

None Not Applicable

1 publication by Dec.

2015

1 publication 3

Achieved

None Not Applicable

LE

D

Stakeholder

Relations:

Business Plans

and/or Proposals

submitted for

funding

2 business plans

submitted for funding

by Dec. 2015

2 business plans

submitted for

funding 3

Achieved

None Not Applicable

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PERFORMANCE

RATE REASONS FOR

DEVIATION

ACTION PLAN L

OC

AL

EC

ON

OM

IC D

EV

EL

OP

ME

NT

Tourism Nodes:

Secure land for

Hlabisa Tourism

Node

Meeting with Mphembeni

Traditional Authority and

Ingonyama Trust by Sept.

2015

Meetings took

place 3

Achieved

None Not Applicable

Application for Hlabisa Node

sent to Ingonyama Trust by

Dec. 2015

Application not

made

1

Not Achieved

Negotiations for land

have not been

concluded; which

led to the deviation

A follow-up

meeting is being

planned with

Mphembeni

Traditional

Authority

Tourism

Nodes:

Secure land for

Jozini (Cecil

Marks Pass)

Node

Meeting with Mngomezulu

Traditional Authority and

Ingonyama Trust by Sept.

2015

Meetings took

place 3

Achieved

None Not Applicable

Application for Jozini Node

sent to Ingonyama Trust by

Dec. 2015

Application not

made

1

Not Achieved

An agreement with

between

Mngomezulu

Traditional Authority

and UMDA has be

drafted and currently

being negotiated

Agreement to be

concluded by

Feb. 2016

Tourism Nodes:

Application for

Feasibility Study

for Hlabisa and

Jozini

Funding application made by

Sept. 2015

Application

made

3

Achieved

None Not Applicable

Engagements with

stakeholders by Dec 2015

Engagements

made 3

Achieved

None Not Applicable

Hotel School

Development:

Business Plan

Stakeholder engagement by

Sept. 2015

Engagement

made

3

Achieved

None Not Applicable

Stakeholder engagement for

land; accreditation; and project

roll-out

One

engagement

made with

Umfolozi FET

2

Partly

Achieved

Engagements made

for accreditation and

project rollout. Land

identification not

concluded.

Conclude

engagements in

Feb 2016

Hotel School

Development:

Application for

funding

Application for fund by Dec.

2015

No application

made 3

Achieved

None Not Applicable

Hotel

Management

Company:

Partnership

agreements

Concept document by Sept.

2015

Concept

document

3

Achieved

None Not Applicable

Identify 4 beneficiaries by Dec.

2015

4 beneficiaries

identified 3

Achieved

None Not Applicable

Research and

Knowledge

Management:

Establishment of

a Tourism Asset

Database

Set up Information

Management System by Sept.

2015

System in place 3

Achieved

None Not Applicable

Verification of Assets by Dec

2015

Verification

conducted 3

Achieved

None Not Applicable

Research and

Knowledge

Management:

Statistics

Reports

Tourism Statistics Reports for

Quarter 1 by Dec 2015

Report not

concluded 1

Not Achieved

Support from

DEDTEA has been

requested for the

target

Reports to be

concluded by

end of Quarter 3

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KPA KPI TARGET

ACTUAL

PERFORMANCE

RATE

REASONS FOR


LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

Fruits and Veg

Production:

Board Approved

business plan for

Fruits Farming

Concept document by Sept.

2015

Concept document in

place

3

Achieved

None Not Applicable

Research on concept by

Dec. 2015 Research conducted

3

Achieved

None Not Applicable

Fruits and Veg

Production:

Board Approved

business plan for

Hydroponics

Draft business by Sept. 2015 Draft business plan in

place

3

Achieved

None Not Applicable

Final Draft Business Plan by

Dec. 2015

Final draft in place 3

Achieved

None Not Applicable

Fruits and Veg

Production:

National School

Nutrition

Programme

Delivery of the right products

at the right quantities to all

533 by Sept. 2015

Delivery ranged at 420

schools per week

2

Partly

Achieved

Challenges with

the constructor led

to the deviation.

An SCM

process has

been initiated to

deal with

deviation.

Systems and

controls are

being

implemented.

Delivery of the right products

at the right quantities to all

533 by Dec. 2015

Delivery ranged at 450

of schools per week 2

Partly

Achieved

Internal Maintenance of

Hubs Plan by Sept. 2015

Maintenance Plan in

place

3

Achieved

None Not Applicable

Internal Maintenance Report

and Environmental Health

Report by Dec 2015

No Maintenance Report

1

Not

Achieved

An Internal Report

has been

prepared and is to

be verified y

Environmental

Health Specialist

Inspection of the

hub to be

conducted in

Feb. 2016

50% of local produce

supplied to NSNP by Sept.

2015

50% reached 3

Achieved

None Not Applicable

60% of local produce

supplied to NSNP Sept. 2015

60% reached 3

Achieved

None Not Applicable

Groundnut

Production:

Partnership with

ADA

Engagements with ADA by

Sept. 2015

Engagements made 3

Achieved

None Not Applicable

Engagements with ADA by

Dec. 2015

Engagements made 3

Achieved

None Not Applicable

Groundnut

Production:

Business Plan

Draft Business Plan by Sept.

2015

Draft business plan in

place

3

Achieved

None Not Applicable

Final Draft Business Plan by

Dec 2015

Final draft business plan

in place

3

Achieved

None Not Applicable

Maize

Production:

Partnership

Agreement

MOU or SLA with

Empangeni Milling by Sept.

2015

No MOU or SLA signed 1

Not

Achieved

Negotiations in

progress no draft

agreement

Engagements to

continue

towards and

SLA

Maize

Production:

Business

Approved by the

Board

Draft business plan by Dec.

2015

Draft business plan in

place 3

Achieved

None Not Applicable

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KPA KPI TARGET

ACTUAL

PERFORMANCE

RATE

REASONS FOR


LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

Small Town

Rehabilitation

Programme:

Submit business

proposal for District

Towns Rehabilitation

Plan

Draft business

proposal by Sept.

2015

Draft business

proposal in

place

3

Achieved

None

Not Applicable

Final business

proposal by Dec

2015

No final draft 1

Not

Achieved

Consultations and

research on proposal not

concluded

Final Draft to be

concluded by Mar. 2016

Small Town

Rehabilitation

Programme:

Establishment of

Mkhuze Market

Stalls

Tender process by

Sept 2015

Tender process

initiated

2

Partly

Achieved

At 30 September 2015

the Bid Adjudication

Committee presented the

findings and

recommendations for

appointment to the CEO

CEO did not agree with

recommendations and

instructed that the tender

be revaluated

Revaluation conducted

and service provider was

appointed on the 30th of

October 2015

Project initiation by

Dec 2015

Project initiation

stage completed

3

Achieved

None Not Applicable

Small Town

Rehabilitation

Programme:

Construction o f

Ndumo Market Stalls

Planning Phase

and Designs by

Sept. 2015

Planning Phase

and Designs not

initiated

1

Not

Achieved

Project placed on hold

by donor

Awaiting instruction from

donor

Tender process

and Bill of

Quantities by Dec

2015

Not initiated 1

Not

Achieved

Small Town

Rehabilitation

Programme:

Mkhuze

Regeneration Plan

Project Inception

by Sept 2015

Inception process

Initiated

2

Partly

Achieved

Implementation Plan was

revised as per donor

requirements.

Inception report

concluded has been

concluded: 11 Oct. 15

Urban

Development

Renewal Designs

and Project Plans

by Dec. 2015

Project at Status

Quo stage 1

Not

Achieved

Misalignment between

the revised and

approved

implementation plan and

the target

Misalignment to be

corrected through

adjustments on the

Midterm Scorecard

Review

Special Economic

Zones

Identity two sites for

SEZ

Land identification

by Sept. 2015

Land not identified 3

Achieved

None Not Applicable

Land identification

by Dec. 2015

Land not identified 3

Achieved

None Not Applicable

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PERFORMANCE

RATE

REASONS FOR

DEVIATION

ACTION PLAN

LO

CA

L E

CO

NO

MIC

DE

VE

LO

PM

EN

T

Mkuze Airport

Development

Signed agreement

with Airline

Operator

Engagements with

Airline Operators by Sept

2015

Engagements

made 3

Achieved

None Not Applicable

SLA with Airline

Operator by Dec. 2015

SLA signed with

Airline Operator

3

Achieved

None Not Applicable

Mkuze Airport

Development:

Obtain PDA

Preparation of PDA

Application by Sept.

2015

Preparation

commenced 3

Achieved

None Not Applicable

Submit PDA Application

by Dec. 2015

Application not

made 1

Not Achieved

Inputs from

Surveyor and

Planner are

outstanding which

led to deviation.

Support from Provincial

Treasury’s Creak Team

has been requested

Mkuze Airport

Development:

Business Plan

Approved by

Board

Draft business plan by

Dec 2015

Draft business

plan in place 3

Achieved

None Not Applicable

District

Broadband

Rollout:

Feasibility Study

Business Plan by Sept.

2015

Business plan in

place

3

Achieved

None Not Applicable

Pilot project by Sept

2015

Pilot Project

commissioned

3

Achieved

None Not Applicable

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KPA KPI TARGET

ACTUAL

PERFORMANCE

RATE

REASONS FOR


INT

ITU

TIO

NA

L D

EV

EL

OP

ME

NT

Performance

Management:

Number of

Performance

Reviews

Signed Performance

Agreements by Sept.

2015

signed

performance

agreements

3

Achieved

None Not Applicable

Recorded Performance

Reviews by Dec 2015 Performance

Reviews

recorded

3

Achieved

None Not Applicable

Implementation

of Personal

Development

Plans:

Training of

Employees in

accordance with

Personal

Development

Plans

Skills Plan by Sept. 2015 Skills plan

developed

3

Achieved

None

FIN

AN

CIA

L V

IAB

ILIT

Y A

ND

MA

NA

GE

MN

ET

Adoption of

Annual Report:

Draft Annual

Report adopted by

Board

Draft Annual Report

adopted by 31 August

2015

Draft Annual

Report Adopted 3

Achieved

None Not Applicable

Report on

financial and

performance

management:

MFMA S87(11)

Reports submitted

to MM

3 S87 Report submitted

by Sept. 2015

3 S87 reports

submitted

3

Achieved

None Not Applicable

Report on

financial and

performance

management:

2014/15 AFS

submitted to AG

S122 Statements

submitted to AG by 31

August 2015

S122 reports

submitted

3

Achieved

None Not Applicable

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Overview of UMDA’s Organizational Scorecard performance

Rating Key No of targets Total %

1

Not Achieved 13 21%

2

Partially Achieved 7 11%

3

Achieved 42 68%

4

Target Exceeded 0 0%

5

Excellent 0 0%

Total 62 100%

68%

11%

21%

Achieved

Partly Achieved

Not Achieved

Recommendation

It is recommended that the Board of Directors consider the Midyear Assessment for

2015/2016 and if necessary; steps be taken be taken to improve performance.

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QUALITY CERTIFICATE

I, MM Ntuli, Chief Executive Officer of Umhlosinga Development Agency, hereby certify

that the mid-year review for 2015/2016 financial year and supporting documentation has

been prepared in accordance with the Municipal Finance Management Act, and the

regulations made under the Act, and that the annual budget and supporting documents are

consistent with the service level agreement with the district municipality.

Mr MM Ntuli

Chief Executive Officer

Umhlosinga Development Agency

umhlosinga development agency assessment umda 2016 (1).pdf · staff workshop conducted to review...

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