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DEPARTMENT FINANCE JUNE 2012

1. FINANCIAL POSITION

STATEMENT OF FINANCIAL POSITION 30 June 2012 Jun-11R R

NET ASSETS AND LIABILITIES

Net Assets 91,078,360 86,187,966 Capital Replacement Reserve 5,522,089 4,411,867 Revaluation Reserve 21,243,633 5,828,305 Accumulated Surplus / (Deficit) 64,312,638 75,947,793

Non-current Liabilities 34,011,930 32,913,606 Long-Term Liabilities 11,485,678 12,814,927 Employee Benefits 22,526,252 20,098,679

Current Liabilities 14,812,757 13,516,295 Current Employee Benefits 6,024,487 5,228,584 Trade Payables 5,276,727 2,267,558 Unspent Conditional Grants and Receipts 2,178,633 4,727,383 Operating Lease Liability - - Current Portion of Long-term Liabilities 1,332,911 1,292,770

TOTAL: NET ASSETS AND LIABILITIES 139,903,048 132,617,866.71

ASSETS

Non-current Assets 47,576,930 52,185,456 Property, Plant and Equipment 46,552,219 51,574,304 Non-Current Assets Held for Sale 75,155 - Investment Property - - Intangible Assets 949,555 611,151 Financial Assets - - Long-term Receivables - -

Current Assets 92,326,118 80,432,411 Taxes 1,173,202 1,489,596 Trade Receivables from Exchange Transactions - - Trade Receivables from Non-Exchange Transactions 1,680,585 2,184,489 Operating Lease Asset 8,241 9,383 Inventory 349,926 370,274 Current Portion of Long-term Receivables - - Discontinued Operations - 344,298 Current Financial Assets - 6,218 Term Deposits 2,900,000 2,900,000 Cash and Cash Equivalents 86,214,164 73,128,152

TOTAL: ASSETS 139,903,048 132,617,867

FRANCES BAARD DISTRICT MUNICIPALITY

JUNE 2012 1


2.FINANCIAL PERFORMANCE

Revenue by Source (YTD):

Regional Serv

ice Levy

Replacem

ent G...

Government g

rants a

nd subsid

ies

Public contrib

utions

Fines

Rental of fa

cilities

& equipment

Interest

earned - e

xternal i

nvestm

ents

Other income

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000 6

7,64

5,00

0

21,

148,

873

120

,000

250

,656

506

,348

5,4

91,3

86

82,

135

67,

645,

000

25,

974,

590

-

- 930

,900

4,8

78,0

00

24,

500

YTD ACTUAL YTD BUDGET

The positive variance on Grants and Subsidies was mainly due to the receipt of the equitable share allocation in respect of the third quarter of the financial year.

Expenditure per classification (YTD):

- 5,000,000

10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000

33,

908,

509

4,5

95,1

82

-

22,

305,

988

121

,538

1,5

14,2

14

2,3

12,3

39

1,7

42,8

32

1,5

16,1

65

-

2,4

37,0

07

26,

363,

917

8,5

65,7

85

38,

474,

390

5,5

21,4

30

3,0

00

3,6

25,5

50

- -

3,4

15,1

50

500

,000

1,5

15,4

10

-

3,6

37,1

00 4

1,77

1,94

8

10,

978,

090

YTD ACTUAL YTD BUDGET

JUNE 2012 2


For this financial year, expenditure was restricted to necessary activities per approved budget & service delivery plans, operating expenditure limit approved by Council and money that we realistically expected to collect. Adequate controls are in place to ensure that overspending does not occur.

Salaries: A summary of the actual salaries paid versus the approved budget allocation is as follows:

Salaries & Allowances Actual Budget Variance Var %38,503,690 43,995,820 5,492,130 12%

Councillors Remuneration 4,595,182 5,521,430 926,248 17%Post-Service Benefits 306,407 794,990 488,583 61%Personnel Remuneration 33,602,101 37,679,400 4,077,299 11% Employee Related Costs 28,189,308 31,398,680 3,209,372 10% Social Contributions 4,702,932 5,302,590 599,658 11% Compulsory Levies 709,861 978,130 268,269 27%

The positive variance on budgeted remuneration was due mainly to the budgeted number of vacancies on the staff structure not filled.

Depreciation: The actual depreciation reflected for the financial year was based on true transaction and acquisition date of asset. Assets are depreciated in accordance with GRAP / GAMAP guidelines per asset type and calculated on cost, using the straight line method over the estimated useful life of assets. Asset acquisitions were included in the capital budget and were depreciated as the year progressed.

Repairs and Maintenance: Apart from standard service contracts, planned or expected maintenance costs incurred during this financial year were mainly in the area of computer software licenses renewal.

Grants and Subsidies: All project payments, whether capital infrastructure or community development in nature, whether funded internally or externally, are included.

Projects that were not completed during the previous year-end (2010/2011) have been rolled over to this new financial year for completion from the accumulated surplus / deficit or applicable unspent grant funding accounts.

Progress on actual expenditure on infrastructure and development projects, in comparison with the budget, is:

Grants & Subsidies Actual Budget Variance Var %25,025,544 37,865,008 12,839,465 34%

Internal / Administration 7,069,817 9,743,438 2,673,622 27%External Beneficiaries 17,955,727 28,121,570 10,165,843 36% State Funded Grants 11,943,171 20,009,570 8,066,399 40% Reserve Funded Grants 5,982,938 8,082,000 2,099,062 26% Revenue Funded Grants 29,618 30,000 382 1%

General Expenses: Actual expenses are expected to increase as planned activities per service delivery and budget plans gain momentum.

JUNE 2012 3


Legal Costs per Department: A summary of the actual legal costs paid versus the approved budget is as follows:

Council Municipal Manager -

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

135

,461

10,

500

150

,000

50,

000

LEGAL COST PER DEPARTMENT

YTD Actual YTD Budget

The actual spending on legal costs reflects mainly for spending needs identification. An amount of R200 000 has been budgeted; and only R145 961 has been spent resulting in a savings of R54 039. Reflected on the graph is the actual year to date versus the full year budget as at 30 June 2012. Projected Operating Results:

Explanation regarding any significant projected positive or negative variances more than 10% versus the approved budget:

Please refer to next page

JUNE 2012 4


Revenue & Expenditure per classification YTD Actual

30 June 2012

REVENUE BY SOURCE:

Interest Earned - External Investments 5,491,386 4,878,000 4,878,000 - 0.00%Interest Earned - Outstanding Debtors - - - - Other 82,135 24,500 24,500 - 0.00%Rental of Facilities & Equipment 506,348 930,900 930,900 - 0.00%Income for Agency Services - - - - Government Grants & Subsidies 21,148,873 26,089,280 26,089,280 - 0.00%Regional Service Levy Replacement Grant 67,645,000 67,645,000 67,645,000 - 0.00%Public Contributions 120,000 - - - Fines 250,656 - - - Transfers From Reserves - - 2,214,680 2,214,680 Gain on disposal of property plant and equipment 80,000 80,000 - 0.00%

Total Revenue: 95,244,399 99,647,680 101,862,360 2,214,680 2.33%

EXPENDITURE PER VOTE:Executive and Council 12,602,366 12,602,366 17,222,090 4,619,724 36.66%Council 7,321,964 7,321,964 9,055,790 1,733,826 19.15%Office of the Municipal Manager 5,280,402 5,280,402 8,166,300 2,885,898 35.34%Finance & Administration 30,675,629 30,675,629 31,089,760 414,131 1.35%Budget & Treasury Office 18,219,249 18,219,249 15,331,410 (2,887,839) -18.84%Corporate Services 12,456,381 12,456,381 15,758,350 3,301,969 20.95%Planning & Development 52,496,772 52,496,772 49,214,010 (3,282,762) -6.25%Planning & Development 11,499,637 11,499,637 14,397,110 2,897,473 20.13%Technical Services 40,997,135 40,997,135 34,816,900 (6,180,235) -17.75%Health 3,690,593 3,690,593 4,683,090 992,497 21.19%Community & Social Services - - - - Public Safety 3,344,076 3,344,076 3,364,060 19,984 0.59%Housing 3,167,549 3,167,549 4,510,820 1,343,271 29.78%

Total Expenditure: 105,976,986 105,976,986 110,083,830 4,106,844 3.73%Transfer to Capital Replacement Reserve 1,185,000 1,185,000 -

Prior year Revenue & Expenditure - - -

NET OPERATING RESULT:- SURPLUS / (DEFICIT) (10,732,587) (7,514,306) (9,406,470) (1,892,164)

Projected Variance

%

Estimated Projection:

2011/12

Approved Budget 2011/12

Projected Variance

R

EXPENDITURE PER VOTE:

Please note that as per direction from National Treasury, the 2011/12 budget is based on an increase of 6% of spending capacity on the previous financial years’ budget.

Results per approved business plans and budget for the financial year under review:

o Executive and Council: Expenditure of Council and Executive was less than the budget by 36.66% as compared to the full year budget.

A total savings on special projects of R17 025 was realised due to less than budgeted spending on projects and projects that were not realised in this financial year.

Legal services: An amount of R200 000 was budgeted, however expenditure occurs as required, currently a variance (not spent to date) of R54 039 is reflected.

JUNE 2012 5


Councillor training: A variance of R20 269 is reflected. Training needs have been identified, however due to the work schedule of councillors, training could not take place and a savings has been realised.

Consultancy: An amount of R1 324 620 was budgeted; only R649 662.99 has been spent resulting in a savings of R674 957.

Further savings under operational expenditure to approximately R788 886.80 was realised – e.g. conferences and seminars, printing and stationery and telephone costs.

o Vacant post of Office Manager in the office of the Municipal Manager still has to be filled.

The annual increase for Councilors’ was decided in December 2011 and implemented in terms of the remuneration of Public Office Bearers Act, 1998 in respect of the 2011/2012 financial year which has been budgeted for the full year.

Finance & Administration:Expenditure of finance and administration was less than the budget by 1.35% as compared to the full year budget.

Approved vacant posts of Labour Relations Officer, Assistant Accountant and Accountant still have to be filled.

Employee Assistance Programme – response rate from officials has been low. The EAP is needs driven.

Consultancy: An amount of R644 620 was budgeted; only R445 576 has been spent resulting in a savings of R199 044.

Repairs and Maintenance; An amount of R2 831 430 was budgeted; only R2 021 574 has been spent resulting in a savings of R818 856.

Development of IT Governance Framework: An amount of R380 000 was budgeted; only R111 632 has been spent resulting in a savings of R268 368. Funds will be rolled-over to the 2012/13 Financial Year.

Further savings under operational expenditure to approximately R718 716 was realised – e.g. conferences and seminars, printing and stationery and telephone costs.

o Planning & Development: Expenditure of Planning & Development is more than the projected budget by -6.25% as

compared to the full year budget. The overspending occurred as a result of impairment of assets to the value of R18 529 246.

o Spatial Planning Township establishment: An amount of R1 087 300 was budgeted; only R331 359 has been spent resulting in a savings of R755 941. Additional funding was requested for the bio-diversity study. Funds will be rolled-over to the 2012/13 Financial Year.

Further savings under operational expenditure for approximately R85 296 was realised – e.g. conferences and seminars, printing and stationery and telephone costs.

o GISA new service provider has been appointed for the capturing of water infrastructure data.Funds will be rolled-over to the 2012/13 Financial Year.

Further savings under operational expenditure to approximately R164 422 was realised – e.g. conferences and seminars, printing and stationery and telephone costs.

JUNE 2012 6


o Local Economic Development 78% of the budget on special projects has been spent as compared to the full year budget;

except for the following deviations: LED Agency: Funds will be rolled-over to the 2012/13 Financial Year. LED Expo: An amount of R450 000 was budgeted and only R238 711 was spent and

the difference was paid by sponsorship funds resulting in a savings R211 289. LED Phokwane Vegetable Plant: Funds will be rolled-over to the 2012/13 Financial

Year. Further savings under operational expenditure to approximately R95 664 was realised – e.g.

conferences and seminars, printing and stationery and telephone costs.

Project Management & Advisory Services

57% of the budget on special projects has been spent as compared to the full year budget; except for the following deviations:

EPWP Grant: An amount of R9 882 000 was budgeted. EPWP is an incentive grant is not an upfront grant, It is a grant rewarded for employment generated. It therefore can only be claimed once employment has been created. The grant rewards entitles R50 per person per day employed once the entity has reached its first FTE (Full Time Equivalent). FTE is equal to 220 days employment created. Thereafter the calculation for the incentive is made.

EPWP Lerato Park: Funds will be rolled-over to the 2012/13 Financial Year. Magereng & Dikgatlong Electricity Master Plan: Funds will be rolled-over to the

2012/13 Financial Year. Maloof Skatepark-Ablution Blocks: An amount of R500 000 was budgeted and no

spending occurred for this project. Further savings under operational expenditure for approximately R44 043 was realised –

e.g. conferences and seminars, printing and stationery and telephone costs.

o Health: 74% of the budget on special projects has been spent as compared to the full year budget;

except for the following deviations: Waste Recycling Equipment: Funds will be rolled-over to the 2012/13Financial Year. Maintenance of Recycling Project: Expenditure relating to the maintenance of the recycling

project will not materialise in this financial year resulting in a savings of R500 000. Further savings under operational expenditure to approximately R219 129 was realised –

e.g. test consumables, pauper burials, sample analysis, conferences and seminars, printing and stationery and telephone costs.

o Public Safety:Expenditure of public safety is less than the projected budget by 0.59%. Certain activities are needs driven.

Housing:Expenditure of housing is less than the budget by 29.78% primarily in the areas of consultancy and special projects. Expenditure of the housing unit is limited to the actual revenue received year-to-date.

EXPENDITURE ON SPECIAL PROJECTS PER VOTE:

JUNE 2012 7


Council & Executive

YTD Actual Budget % Spending RemarksCouncilDistrict Aids Council Grant 133,714 114,690 116.59% Completed - OverspendingGoodwill Fund Projects: Executive Mayor 1,892 4,000 47.31%Commemorative Days 38,273 50,000 76.55%11/12: Contribution Maloof Money Cup SA 126,500 126,500 100.00% CompletedTotal 300,380 295,190 101.76%

Municipal ManagerEmployee Assistance Programme 11,935 30,970 38.54% Completed - SavingsPublic /Private Funded Grants - PROJ 1 11,999 - Total 23,934 30,970 77.28%

CommunicationsCFS System 4,791 4,430 108.15% Completed - OverspendingPAIA Management 6,941 12,000 57.85% Completed - Savings

Branding 9,901 20,000 49.50%Branding to be rolled out in full now that the visual standards manual is completed

Total 21,633 36,430 59.38%

YTD Actual Budget % Spending RemarksCommittee & Administration Services2011: Spec Proj - Youth Unit 29,618 30,000 98.73% Completed - SavingsTotal 29,618 30,000 98.73%

Finance & Administration

YTD Actual Budget % Spending Remarks

Finance: DirectorateFinanacial System Support (3) LM 474,321 450,000 105.40% Completed - OverspendingTotal 474,321 450,000 105.40%

Finance: Budget OfficeCapacity Building & BTO Operation 167,313 180,000 92.95% Completed - SavingsTotal 167,313 180,000 92.95%


Develop IT Governance Framework 111,632 380,000 29.38% Implementation - Roll Over 2012/13 Financial YearTotal 111,632 380,000 0.02%

YTD Actual Budget % Spending RemarksHuman Resource Management

Employee Assistance Programme 23,583 100,000 23.58% Needs drivenEmployee Wellness 444,348 495,000 89.77% Completed - SavingsHIV VIP Primer 217,297 220,000 98.77% Completed - SavingsTotal 685,228 815,000 84.08%

Information Communication & Technology

Environmental Health

JUNE 2012 8


YTD Actual Budget % Spending RemarksEnvironmental HealthWaste Recycling Project 1,609,509 1,546,000 104.11% Completed - OverspendingWaste Recycling Equipment 452,129 700,000 64.59% Retention - 2012/13 Financial YearAwareness Program - Sanitation, HIV and Enviro Days 31,535 50,000 63.07% Spending according to programmesAwareness Program IWMP & EMF 3,400 25,000 13.60% Spending according to programmesMaint Recycling Project - 500,000 0.00% Will not materialise during this finacial year - SavingsAir Quality Management Plan 56,219 95,000 59.18% Completed - SavingsTotal 2,152,792 2,916,000 73.83%

Planning & Development

YTD Actual Budget % Spending RemarksPlanning & Development DirectorateDikgatlong Town Plan 307,016 300,000 102.34% Completed - OverspendingPreparation of By-Laws 181,825 200,000 90.91% Completed - SavingsEstablish Water Infrastructure System 700,000 700,000 100.00% Completed Total 1,188,841 1,200,000 99.07%

IDP / PMS ManagementIDP Review and Implementation 17,094 38,660 44.22% Completed - SavingsTotal 17,094 38,660 44.22%

YTD Actual Budget % Spending RemarksGISGIS - Capture Water Infrastructure 80,683 147,020 54.88% Project roll-over 2012/13 Financial YearTownship Establishment 331,359 1,003,160 33.03% Project roll-over 2012/13 Financial YearTotal 412,042 1,150,180 35.82%

Spatial Planning Township Development Project - 84,140 0.00% Project roll-over 2012/13 Financial YearTotal - 84,140 0.00%

YTD Actual Budget % Spending RemarksHOUSINGHousing Consumer Education 8,272 22,000 37.60% Roll Over 2012/13 Financial Year Housing HDD Field Workers 238,679 250,000 95.47% Roll Over 2012/13 Financial Year REV. Housing Chapters - 350,000 0.00% Roll Over 2012/13 Financial YearDevelopment Housing Strategy - 19,500 0.00% Completed in-house: savings

Housing Register Contractors - 40,600 0.00%COGHSTA paid for the registration of Contractors - Savings

Total 246,951 682,100 36.20%

JUNE 2012 9


YTD Actual Budget % Spending RemarksLED / TourismLED Capacity Building 17,148 16,000 107.17% Completed - OverspendingLED Social Responsibility / Miners 2,720 7,000 38.86% Completed - SavingsLED Agency 9,971 70,000 14.24% Project roll-over 2012/13 Financial YearLED Forums 19,554 20,000 97.77% Completed - SavingsLED - NCTA Support 135,000 135,000 100.00% Spending completedTOUR Business Plan Competition 195,711 270,000 72.49% Completed - Savings; Workshops did not materialiseLED Phokwane Vegetable Plant 88,115 90,000 97.91% Completed - SavingsLED Entrepreneur Program 132,038 156,000 84.64% Completed - Savings; One graduate not appointedLED Bokomotso Dikgatlong 80,652 80,000 100.82% Completed - OverspendingLED Kgololosego Phokwane 152,312 150,000 101.54% Completed - OverspendingLED SMME Development 164,294 164,530 99.86% Completed - SavingsLED EXPO 238,711 450,000 53.05% Completed - Savings; Received sponsorshipLED Phokwane vegetable Plant 38,626 60,000 64.38% Project roll-over 2012/13 Financial YearTOUR Marketing Brochure 163,376 200,000 81.69% Completed - SavingsTOUR SAN Community Culture Village 150,000 150,000 100.00% Spending completedTOUR Wildebeestkuil Rock Art 100,000 100,000 100.00% Spending completedTOUR SMME Registration & Grading 100,000 100,000 100.00% Spending completedTOUR Tourism Guide Training 189,327 250,000 75.73% Completed - SavingsTOUR Capacity Building 119,300 120,000 99.42% Completed - SavingsTOUR Capacity Building Phokwane 33,885 100,000 33.88% Completed - Savings; Municipality not readyTOUR Product Owners Meeting Grading 71,751 100,000 71.75% Completed - SavingsTOUR Indaba Trade EXPO 113,167 120,000 94.31% Completed - SavingsTOUR Know Your Region Campaign 28,396 60,000 47.33% Completed - SavingsTOUR N12 Treasure Route 20,000 20,000 100.00% Spending completedTOUR NCTA Marketing Meetings 13,144 15,000 87.62% Completed - SavingsTOUR Association Meetings 4,741 10,000 47.41% Completed - SavingsTOUR Advertising 156,850 270,000 58.09% Completed - SavingsTOUR NAT Tourism Day Celebetrations 10,000 10,000 100.00% Spending completedTOUR PROV Tourism Month Celebration 10,000 10,000 100.00% Spending completedTOUR N12 Information Boards 87,889 100,000 87.89% Completed - SavingsTOUR N12 Promotion 50,000 50,000 100.00% Spending completedTOUR Contribution Gariep Festival 100,000 100,000 100.00% Spending completedTOUR / LED SMME EXPO 29,760 85,000 35.01% Completed - Savings; NEPAD Summit not attendedContribution to Doring Fees 100,000 100,000 100.00% Spending completed

Total 2,926,438 3,738,530 78.28%

FIRE FIGHTING / DISASTER MANAGEMENT


Assit: Fire Fighting Equipment Maintenance 20,870 90,000 23.19% Utilised as per requestVolunteers Training 66,428 66,500 99.89% Completed - SavingsVolunteers Fire Equipment 30,403 49,380 61.57% Completed - SavingsEquipment - FF Personnel - 15,000 0.00% SavingsDisaster Management Volunteers Project 121,863 180,000 67.70% Expenditure as per requestDisaster Management Forum - 4,000 0.00% Savings

Total 239,564 404,880 59.17%

FIRE FIGHTING / DISASTER MANAGEMENT.

JUNE 2012 10



PROJECT & ADVISORY SERVICESEQS 11/12 - Magareng: MNT Water Treatment Works 222,887 300,000 74.30% Spending completed - savingsEQS 11/12 - Magareng: MNT Waste Treatment Works 84,828 300,000 28.28% Spending completed - savingsEQS 11/12 - Magareng: MNT Electricity Network 276,743 300,000 92.25% Spending completed - savingsEQS 11/12 - Magareng: MNT Water and Sewer Network 186,431 250,000 74.57% Spending completed - savingsEQS 11/12 - Magareng: MNT Street & Stormwater 1,540,803 1,650,000 93.38% Spending completed - savingsEQS 11/12 - Phokwane: MNT Water Treatment Works 399,319 400,000 99.83% Spending completedEQS 11/12- Phokwane: MNT Waste Treatment Works 499,980 500,000 100.00% Spending completedEQS 11/12 - Phokwane: MNT Electricity Network 499,600 500,000 99.92% Spending completedEQS 11/12 - Phokwane: MNT Water and Sewer Network 250,000 250,000 100.00% Spending completedEQS 11/12 - Phokwane: MNT Street & Stormwater 398,571 400,000 99.64% Spending completedEQS 11/12 - Dikgatlong: MNT Water Treatment Works 546,609 550,000 99.38% Spending completedEQS 11/12 - Dikgatlong: MNT Waste Treatment Works 320,996 400,000 80.25% Spending completed - savingsEQS 11/12 - Dikgatlong: MNT Electricity Network 144,007 150,000 96.00% Spending completed - savingsEQS 11/12 - Dikgatlong: MNT Water and Sewer Network 59,875 62,000 96.57% Spending completed - savingsEQS 11/12 : Service Private Owned Land 999,959 1,000,000 100.00% Spending completedEPWP Unallocated - 9,882,000 0.00% Incentive Grant not materialisedDWAF: 11/12 SANITATION MVULA TRUST 1,429,960 1,429,960 100.00% Spending completed10/11: DWA ASSESS W/W TREAMENT WORKS 68,260 68,260 100.00% Spending completedEPWP 11/12 : Bush Clearance 78,452 185,420 42.31% Implementation - Roll Over 2012/13 Financial YearRES: DMA 11/12 - Eelectricity Selfbuild Roll Over 1,793,844 2,192,330 81.82% Retention and savingsRES 11/12 : Phokwane: Pave Roads 1,399,721 1,400,000 99.98% Phase 1 Completed - SavingsREVF 11/12 - SOL: MNT Streets and Stormwater 597,202 650,000 91.88% Spending completed - Savings

REVF 11/12 - SOL: MNT Platfontein Sewer 99,226 100,000 99.23% Spending completed - SavingsREVF 11/12 - Dikgatlong: MNT Water and Sewer Network 224,742 238,000 94.43% Spending completed - SavingsREVF 11/12 - Dikgatlong: MNT Street & Stormwater 695,448 700,000 99.35% Spending completed - Savings

REVF 09/10: 11/12: Phokwane: Pave Roads 2,301,981 2,312,000 99.57% Spending completed - savingsREVF 09/10: 11/12: Magareng Refuse Truck 1,600,000 1,600,000 100.00% Spending completedREVF 09/10: 11/12: Dikgatlong: Water Treatment Works 646,691 1,412,000 45.80% Spending completed - savingsREVF 09/10: 11/12: Magareng: Electricity Masterplan - 270,000 0.00% Roll Over 2012/13 Financial Year - Tender price too highREVF 09/10: 11/12: Dikgatlong: Eelctricity MasterPlan - 300,000 0.00% Roll Over 2012/13 Financial Year - Tender price too high11/12: MALOOF SKATEPARK-ABLUTION BLOCKS - 500,000 0.00%

Total 17,366,136 30,251,970 57.40%

JUNE 2012 11


Projected Capital Expenditure Results:

A detailed projection of capital expenditure per vote as well as variances reflected in rand value and / or percentage follows:

Capital Expenditure per vote YTD ActualEstimated

Projection: 2011/12

Approved Budget 2011/12

Projected Variance

R

Projected Variance

%

CAPITAL EXPENDITURE PER VOTE:Executive and Council 137,616 137,616 194,060 56,444 29.09% Council 1,550 1,550 5,000 3,450 - Office of the Municipal Manager 136,066 136,066 189,060 52,994 28.03%Finance & Administration 943,604 943,604 1,454,340 510,736 35.12%Budget & Treasury Office 295,324 295,324 296,700 1,376 0.46%Corporate Services 648,280 648,280 1,157,640 509,360 44.00%Planning & Development 1,312,649 1,312,649 1,457,590 144,941 1 Planning & Development 47,590 47,590 103,590 56,000 54.06%Technical Services 1,265,059 1,265,059 1,354,000 88,941 6.57%Housing 41,884 41,884 72,100 30,216 0.00%Health - - - - 0.00%Community & Social Services - - - - 0.00%Public Safety 1,101 1,101 300,000 298,899 99.63%

Total Capital Expenditure: 2,436,854 2,436,854 3,478,090 1,041,236 29.94%

Expenditure on capital acquisition was 70% as compared to the full year budget at the period of reporting.

Computer Equipment 58% of computer equipment has been acquired resulting in an under spending of R543 186.

Office Equipment 63% of office equipment has been acquired to date as compared to the full year capital budget

resulting in an under spending of R2 167.54

Furniture and Fittings 20% of the furniture and fittings have been acquired resulting in an under spending to the

value of R46 737.

Motor Vehicles Procurement of a motor vehicle with a tow bar, caravan and sliding cover for the double cab

is complete.

Plant & Equipment 70% plant & equipment has been acquired resulting in an under spending of R34 028.

Buildings & Facilities 73% of buildings & facilities has been spent on alteration and renovations resulting in an

under spending of R410 682.

Grant Funding:

JUNE 2012 12


External funding account balances reflect transfers to revenue adequate to cover the relevant operating or capital expenditure for which the funds have been received.

Grant funding is reflected as unspent grants where relevant, with revenue transferred to the income statement as expenditure is incurred.

A summary of grant fund movements is set out below:

EXTERNAL FUNDING Balance Fwd Received Applied BalanceEquitable Share - 79,281,000 79,281,000 - Financial Management Grant - 1,250,000 1,250,000 - Municipal Systems Improvement Grant - 1,200,000 1,200,000 - Municipal Infrastructure Grant - - - - DWAF - Sanitation (Mvula Trust) 1,489,217 - 1,489,217 - Expanded Public Works Program Grant - - - - NCPA - Housing Accreditation Grant 1,077,953 2,783,799 3,148,561 713,191 District Aids Council 114,682 - 114,682 - NEAR Control Centre - 569,000 - 569,000 Firefighting Equipment 352,364 371,000 - 723,364 SETA Skills Grant - 170,324 170,324 - Vuna Awards - - - - NC TOURISM - - - - EPW: Lerato Park 185,421 - 78,452 106,969 Environmental Health Recycling Project 1,427,746 700,000 2,061,638 66,108 Koopmansfontein Self Build Scheme 80,000 16,000 96,000 -

Total 4,727,383 86,341,123 88,793,873 2,178,633


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3. CASH AND INVESTMENT

OPERATING FLOWS (82,575,159) (72,569,165)

- Salaries, wages and allowances (39,731,307) (39,008,535)- Cash and creditor payments (55,129,658) (37,099,388)- Statutory Payments (incl VAT) (2,561,407) (5,868,067)- Other payments (122,395) - - Revenue receipts (1,607,683) (2,649,889)- Statutory Receipts (incl VAT) 7,376,480 5,407,505 - Capital payments 6,534,246 3,738,129 - Other revenues 2,666,564 2,911,080

INVESTMENT FLOWS (11,600,000) (13,000,000)

- Investments made-OUT (86,500,000) (117,000,000)- Investments redeemed 74,900,000 104,000,000

FINANCING FLOW 96,237,132 85,655,176

- External loans repaid (1,051,524) (1,367,409)- External loans received - - - Utilisation of Overdraft Facility - - - Grants and subsidies 97,288,656 87,022,585

Nett Cash Generated from operating activities 2,061,973 86,012

Increase / (Decrease) in investment activities 10,100,000 13,000,000

Nett increase / (Decrease) in cash and cash investments 12,161,973 13,086,012

CASH AND CASH EQUIVALENTS

Balance at the end of the Year 76,028,152 89,114,164 Balance at the beginning of the Year 63,866,179 76,028,152

Net increase / (Decrease) in cash and cash equivalents 12,161,973 13,086,012

CASH FLOW REPORT 30-Jun-11 Jun-12

Cash Flow Statement

Cash flow for the period ended 30 June 2012 reflected a positive amount of R13.08m as a result of receiving Equitable Share Grant for third quarter ending 31 March 2012.

JUNE 2012 14


Cash Balances:

The following bank and investment balances were held at the reporting date:

Bank Statement + 3,364,665 Less: Outstanding Cheques 657,313 Minus Unreconciled Direct PaymentsMinus: Cancelled ChequesPlus: Unreconciled DepositsMinus Unreconciled Direct PaymentsSalary PaymentsCreditors PaymentInvestmentsCash Book Balance + 2,707,352 Adjustment to Bank - Standard Bank - 3,512 Adjusted Cash Book Balance + 2,710,864 * None > 3 Months

SURPLUS CASH INVESTED

Absa 11,750,000 Standard Bank 34,750,000 First Rand 10,750,000 Nedcor 25,750,000 Absa [Collateral security - Due 30 June 2011] 500,000 Standard Bank[Leave reserve -Due 30 June 2011] 2,900,000 Total Cash Investments 86,400,000

Petty Cash float 3,300

Total Cash on Hand 89,114,164

Surplus cash is invested at approved banking institutions in accordance with current cash and investment policy.

4. REVENUE AND DEBT COLLECTION MANAGEMENT

Sundry Debtors:Council’s debtors consist of three main groups, namely:

Provincial or Local government bodies for services rendered to or on behalf of these bodies, Ex-employees entitled to post-service benefits, Other entities by way of service delivery for which costs are to be recovered.

Matters reported below are in respect of debts outstanding in excess of 90 days on the effective reporting date.

Provincial and Local Government - Department of RoadsThe only outstanding debts reflected for more than 90 days as at 30 June 2012 is Department of Transport, Roads and Public Works R425 662.37 for medical aid payments and R247 301.91 for furniture of the Council house and Department of Health R1710.00 for hiring of the Lecture Rooms.

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Post-Service BenefitsDebtors are being managed in terms of the approved credit control policy. No significant difficulties are evident at present. Management of these debtors has improved with the aggressive application of the credit control policy. A large portion of the post-service benefits will be recovered from Department of Transport, Roads and Public Works and the matter will be finalized in due course.

Sundry DebtorsNo difficulties are experienced due to the fact that strict credit control procedures are applied in terms of Council’s Credit Control Policy. The only outstanding debts reflected for more than 90 days as at 30 June 2012 is Jansen van Vuuren R5 002.90 for crashing into the main entrance gate. Debts are continuously monitored and reviewed and adequate controls are in place according to approved policies.

The DMA has fallen away, transfer of the assets, revenue and expenditure linked to this occurred in October 2011.

5. EXPENDITURE MANAGEMENT

The expenditure section continued to administer, manage, assess and improve creditors, salaries and sundry payments subject to internal prescriptions.

Salary Payment:

Salary payments are under adequate control and take place according to approved policies and agreement in terms of the Bargaining Council.

Salary increases of 6.08% for staff have been implemented in August 2011 back-dated from July 2011. Staff annual bonuses have been paid at the end of November 2011.

Trade Creditors:

Council purchases and payments to creditors are under adequate control. There are no orders and invoices that are more than 30 days old and unpaid.


JUNE 2012 16


PAYMENTSTotal value of all payments 14,574,405R Electronic transfers 258 Cheques issued 55

STORESValue of Stores issued 20,066

SALARIESNumber of salary beneficiaries 196 Councillors 28 Employees 164 Pensioners 4

Total remuneration paid 2,629,588 Councillors 362,689 Employees 2,260,721 Pensioners 6,178

Expenditure controls are continuously being re-evaluated and tightened up to allow closer monitoring of daily purchases, order transactions and the extension of budgetary control over departmental activities.

6. Supply Chain Management:

Although council adopted a new procurement policy effective from 1 January 2008 a number of issues still impact negatively on the effective implementation of the mentioned policy. The following are some of the issues that still need attention in order to ensure full compliance as stipulated in the policy:

The development and implementation of a new centralized procurement procedure has started and is in line with the SCM policy. Monitoring is on an ongoing basis and as problems arise, they will be dealt with.

Amendment and procedures with regard to the tender committee system (Specification, Evaluation and Adjudication Committees) still needs attention. Monitoring is on an ongoing basis and as problems arise, they will be dealt with.

Putting systems in place to monitor and report on supply chain management as required per approved policy has started as from 1 April 2008. Monitoring is on an ongoing basis and as problems arise, they will be dealt with.

As Council reserves its right to maintain oversight over the implementation of the Supply Chain Management Policy and is empowered to make Supply Chain policy within the ambit of the applicable legislation, the following is hereby reported as stipulated in the SCM policy for the period May 2012.

Implementation of the Approved Supply Chain Management Policy:The approved Supply Chain Management Policy of 30 November 2005 as amended on 27 November 2007 is implemented and is maintained by all relevant role players as from 01 April 2008.

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Implementation of the Supply Chain Management Process:

• Supply Chain Management Training

No training was offered or attended by supply chain management personnel.

• Demand Management

Bids and quotations were invited in accordance with the Supply Chain Management Policy. Bid documents used were customised, standard bid documents prescribed by National Treasury. All preconditions were enforced during the opening of bids including the verification on Tax Clearance Certificates issued by SARS.

• Acquisition Management

For the period of June 2012, one contract (R200 000+) was awarded by the Bid Adjudication Committee.

1. Refurbishment of sand filters at Barkly-West: C-Pac – R2 496 771.00 including VAT

For the period of June 2012 four written price quotations (R30 000-R200 000) were awarded by the Acting Municipal Manager.

1. Supply and delivery of Autodesk: JAKK Construction – R 55 742.002. Three phase electrical connection: Mooks Electrical – R39 729.003. Property Valuation: ValuData – R85 785.004. Diamond mesh Fencing: JAKK Construction – R43 993.23

The value of orders issued for the period ending 30 June 2012 total R1 424 236.52 (See Annexure “A”)

Orders per departmentCouncil and Executive R13 994.94Municipal Manager R12 372.58Finance R2 499.43Administration R392 636.31Planning and Development R203 132.58Technical Service R799 650.70

• Disposal Management

No disposals for June 2012

Deviations

Two deviations were approved by the Acting Municipal Manager

1. Replacement and repair of UPS: Electrolabs – R42 208.552. Analysis of Organisational Structure: HR Concepts – R28 520.00

JUNE 2012 18


Issues from Stores

Total orders issued R20 065.99 Issues per department

Council and Executive R0.00Municipal Manager R0.00Finance R3 470 .11Administration R13 593.32Planning and Development R2 871.98Technical Service R130.58

List of accredited service providers

The supplier’s database is updated daily and the database is amended to make provision for the MBD4 and MBD9 forms as required by the Auditors General’s report.

Internal Provisions:

Council has internal liabilities related to personnel bonuses, performance bonuses, leave, post-employment health care, pension and long service awards provisions. These liabilities are adequately provided for and are included under Provisions in the Statement of Financial Position and these provisions are properly backed by cash reserves where applicable.

ASSET AND RISK MANAGEMENT

Insurance:

All Council assets are adequately insured with Alexander Forbes over a 3 year period. The insurance portfolio / costing was reviewed and implemented in July 2011. The 3 year contract expired on 30 June 2012 and currently all council assets are covered on a month-to-month basis until a new service provider has been appointed. The tender has been advertised and a new service provider will be appointed soon.

Asset Inventory:

TAT I-Chain Asset Management System has been implemented. The next asset stock take is scheduled for 30 May to 12 June 2012 as per requirement of Councils’ Asset Management Policy.

Information Backup:

All shared data on the internet system (O & P drives only) is backed up on the server with a further daily tape backup kept on the premises. System users are responsible for ensuring that data backup and maintenance is carried out with regard to their specific usage. General ledger and associated financial system data is backed up on the network server tape system.The implementation and use of the new “e-Venus” financial system has started on 1 July 2009 with minor hiccups, but the problems identified are being attended to. A daily backup is done as well as a day end procedure to integrate the day’s transactions. On the last working day of each month a monthly calendar and financial (a few days after month end to accommodate financial transactions

JUNE 2012 19


pertaining to the month closed) backup and integration including closing of votes and opening thereof in the new month is done.

The Blueprint System has been fully implemented. The system is an aid to managing projects. Monitoring is enhanced and implementation of projects is accelerated. Because each project has been allocated with different vote numbers, each manager will be responsible for monitoring and reporting on the progress of projects within the ambit of his/her department. This is a total deviation as to the management of projects in the past.

Motor Vehicles - Utilization Statistics: Council operates a pool of 20 vehicles as part of its routine activities.

Statistical information regarding the year-to-date utility for June 2012 is as follows:

Vehicle Vehicle Year Registration Service License Year End Current Km YTDDescription Allocation Model Number expires Km Reading Reading Utility

1 Mercedes Benz Council 2006 FBDM 1 NC 150,000 9/30/2012 55,526 144,741 89,215 2 Citi Golf Pool 2005 BSM 014 NC 90,000 4/30/2013 73,975 84,222 10,247 3 Mazda Drifter D/Cab Pool 2005 BSM 137 NC 210,000 4/30/2013 188,465 202,504 14,039 4 Chevrolet Cruze 1.8 LS Pool 2010 CBY 226 NC 60,000 9/30/2012 17,529 50,031 32,502 5 Chevrolet Opel Corsa 1.4 iDisaster Management 2010 CBY 227 NC 30,000 9/30/2012 8,433 26,446 18,013 6 Chevrolet Captiva Pool 2011 CDM 296 NC 30,000 11/30/2012 68 20,388 20,320 7 Isuzu 2.4 Environmental Health 2006 BVC 305 NC 165,000 7/31/2012 136,339 156,944 20,605 8 Isuzu 2.4 Environmental Health 2006 BTT 339 NC 150,000 4/30/2013 129,226 148,190 18,964 9 Nissan D/Cab Disaster Management 2006 BTT 376 NC 105,000 4/30/2013 83,245 100,571 17,326 10 Toyota Corolla Pool 2009 BZP 439 NC 75,000 9/30/2012 44,715 73,235 28,520 11 Toyota Corolla Pool 2009 BZP 440 NC 75,000 9/30/2012 50,068 63,210 13,142 12 Toyota Condor Tourism Centre 2001 BLR 461 NC 200,000 6/30/2013 171,370 191,842 20,472 13 Isuzu 2.4 Housing 2009 CBD 761 NC 60,000 2013/02/29 32,138 57,967 25,829 14 Toyota Corolla Pool 2008 BXL 799 NC 120,000 2013/02/29 97,169 116,888 19,719 15 Nissan LDV Community Development 2006 BVC 831 NC 120000 7/31/2012 103,365 117,594 14,229 16 Ford Bantam Finance 2004 BRD 836 NC 90000 1/31/2013 76,985 81,748 4,763 17 Toyota Hilux PMU 2004 BRF 837 NC 130000 2013/02/29 110,175 120,075 9,900 18 Isuzu KB. 200 Disaster Management 2010 CBY 895 NC 15000 9/30/2012 2,241 13,525 11,284 19 Isuzu KB. 200 Disaster Management 2010 CBY 898 NC 15000 9/30/2012 1,703 11,785 10,082 20 Toyota Condor PIMSS Centre 2002 BMT 978 NC 165000 2013/02/29 142,110 159,725 17,615

YEAR TO DATE UTILITY - FULL FLEET 416,786

Volkswagen Microbus registration number BMG 088NC and Toyota LDV registration number BMT 234 NC has been transferred to Magareng Municipality.

Motor Vehicle: Operating Cost The actual operating costs of Council motor vehicles incurred for the year to date as required in terms of the newly adopted motor vehicle fleet policy are set out below:

JUNE 2012 20


ACTUAL BUDGET VARIANCE VAR %

Depreciation: Motor Vehicles - 513,980 (513,980) -100.00%Insurance 4,470 55,000 (50,530) -91.87%MV Administration Levy 19,739 16,000 3,739 23.37%Fuel 564,646 610,000 (45,354) -7.44%Licence 6,232 12,650 (6,418) -50.74%Repairs and Maintenance 97,386 90,000 7,386 8.21%Tyres 25,807 64,600 (38,793) -60.05%

TOTAL 718,279 1,362,230 (643,951) -47.27%

VEHICLE OPERATING COST

Motor Vehicle Damage Report

Mazda Double Cab, registration number BSM 137 NC has been taken in for repairs.Chevrolet Cruze CBY 226 NC was damaged during March 2012. A report from the responsible person has been requested and is still outstanding. A requisition has been made out for the repairs.

Motor Vehicle Tracker System

A new vehicle tracker system was installed on 22 December 2010 in all council’s pool vehicles by Altech Netstar. A presentation of the system by Altech was done during the joint management meeting held on 18 February 2011. All staff has been briefed about the system.

7. FINANCIAL REPORTING AND BUDGETING

Budget Process:

The budget process plan in respect of the 2012/13 financial year has been submitted to the Executive Mayor for approval on 27 July 2011 and has also been given to National Treasury. The strategic planning session took place one 02-03 February 2012 at Christiana. This has the following impact on the budget process plan:

DATE ACTIVITY17 February 2012 Returns from Managers re budget due27 February 2012 Meet with Managers re budgets submitted09 March 2012 Completion of Draft Budget (Budget Office)15 & 16 March 2012 Draft Budget presented to Council28 March 2012 Draft Budget to be approved by Council18 to 20 April 2012 Review budgets with Managers & Budget

Committee08/09 May 2012 Budget consultation process30 May 2012 Approval of Final budget 2012/2013

Adjustment Budget 2011/2012:

The adjustment budget was tabled and approved on 25 January 2012 at a Council meeting. A second adjustment budget was tabled and approved on 27 June 2012. The information reflected in this report is based on movements of the second Adjustment Budget 2011/2012.

JUNE 2012 21


Monthly Reporting

Monthly financial reporting as per DoRA and MFMA requirements to Council, National & Provincial Departments and other stakeholders have been adequately adhered to for the month under review.

Financial Statements for the Year-ended 30 June 2011

The Annual Financial Statements for the year ended 30 June 2011 was submitted to the Audit Committee and to the Auditor General on 31 August 2011 for Auditing. Audit Committee meeting took place on 29 August 2011 to review and give input on the submission of the 2010/11 Financial Statements. The District Municipality received a Qualified Audit Opinion for the 2010/11 Financial Year Audit.

8. MFMA IMPLEMENTATION OVERSIGHT

Council’s progress on the implementation of the MFMA proceeds according to set targets and due dates determined for a medium capacity municipality.

A comprehensive oversight report on the progress of implementation and compliance per MFMA requirements is attached as Annexure “B”and “C” to this report.

Support to Local Municipalities

No support was requested or offered to Local Municipalities.

9. PERSONNEL

Personnel Attendances:

Personnel attendance in the workplace for June 2012 averages 88%. The reason for the deviations is mainly due to study, annual, sick, and family responsibility leave.

Attendance trends are summarized as follows:

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Senior Middle Supervisory Clerical Management Management

Number of Members 1 4 3 17

Leave 0 4 3 6Sick Leave 0 0 2 14Courses / Seminar 0 10 0 0Meetings 0 0 0 0Family Responsibility 0 0 0 7Study 0 0 0 3Maternity Leave 0 0 0 0Union Matters 0 0 0 0Absent 0 0 0 0Special Leave (SAMSRA) 0 0 0 0

No. of Workdays Attended 21 70 37 243Total Workdays 21 84 42 273Percentage attendance per Group 100% 83% 88% 89%Average 88%

Personnel Development:

On 04 -05 June 2012 two officials attended the Municipal Finance Management Programme (MFMP).

10. INTERNSHIP PROGRAMME

As per National Treasury regulations, five Finance Interns were appointed (four on 15 February 2010 and one on 01 March 2010). The aim of the programme is to capacitate Finance graduates to eventually be able to fill CFO and other financial posts in municipalities. Their appointment is for a period of 24 to 36 months depending on completion of the programme.

They are being assisted in completing a personal development plan (PDP) and a Portfolio of Evidence (POE) as per NT guidelines. Meetings are held with Interns to discuss their progress and problems they may experience.

A training schedule has been drawn up. It is envisaged that they be exposed to all functions within a municipality.Various financial reconciliations have to be done on an ongoing basis and the Interns have been given this task with various personnel responsible for these reconciliations, as their mentors.

All Interns have attended the Municipal Finance Management Programme and they have completed the MFMA DVD learning programme. The Municipal Finance Management Programme was completed on 20 April 2012. Therefore, the Internship contract that was to end on 29 February 2012 has been further extended to 31 July 2012 to give them practical exposure.

CONCLUSION

According to the results presented above for the period ending 30 June 2012, Council maintains a healthy financial position with respect to its cash and reserves.

DIRECTOR: FINANCE

JUNE 2012 23

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