KZN272 Jozini AFS 2019_20 unaudited

2.7 MB·

Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements
for the year ended 30 June 2020
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
General Information
Legal form of entity Local Municipality- Municipality in terms of section 1 of the Local
G overnment: Municipal Structures Act (Act 117 of 1998) read
with s ection 155 (1) of the Constitution of the republic of South
Africa (Act 1 08 of 1996)
KZN 272
Nature of business and principal activities Service Delivery - Municipality
Legislation governing the municipality's operations Local Government: Municipal Finance Management Act (Act no.56 of
2003)
Constitution of the Republic of south Africa (Act 108 of 1998)
Municipal Property Rates Act (act of 6 2004)
Division of Revenue Act (Act 1 of 2007)
Local Government: Municipal Systems Act (Act 32 of 2000)
Mayoral committee
Mayor DP Mabika Mayor
EL Gumbi Speaker from 1 July 2019 to 20 March 2020 and ordinary
Councillor from 20 March 2020
NS Myeni Deputy Mayor from 1 July 2019 to 20 March 2020 and
Speaker from 20 March 2020
SZ Mathenjwa EXCO Member
TD Khuzwayo EXCO Member
NR Zulu EXCO Member from 1 July 2019 to 20 March 2020 and
Deputy Mayor from 20 March 2020
RH Gumede EXCO Member
ME Ndlela EXCO Member
M Mathe EXCO Member from 20 March 2020
NF Mthethwa EXCO Member from 28 August 2020
Councillors MZ Nyawo
HE Myeni
MZ Tembe
TR Fakude
RN Ndlovu
PS Shabangu
PNS Ngubane
SR Myeni (Posthumous)
DP Jobe
SW Nkonyane
B Nhlenyama
JE Buthelezi
LA Khumalo
SK Mncwango
SV Mathenjwa
TW Zikalala
B Mahaye
VE Gumede
V Mthethwa
ML Mavundla
MS Nkosi
JP Mkhwamubi
1
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
General Information
SS Mkhize
BQ Gumede
BI Msweli
TM Khumalo
PE Vilane
TZ Nyawo
MZ Nxumalo
NL Gumbi
SP Myeni
Grading of local authority Grade 3
Accounting Officer Mr JA Mngomezulu
Chief Finance Officer (CFO) Mr MT Nkosi
Registered office Bottom Town
Circle Street
Jozini
3969
Business address Bottom Town
Circle Street
Jozini
3969
Postal address Private Bag x028
Jozini
3969
Bankers ABSA BANK
FNB BANK
Auditors Auditor General of South Africa
Registered Auditors
Attorneys WEICH KRIEL INCORPORATED ATTORNEYS
NDWANDWE ATTORNEYS
UBUNTU BUSINESS ADVISORY AND CONSULTING (PTY) LTD
KHWELA ATTORNEYS
MKHIZE ATTORNEYS
Municipal Contact Details [phone]
[phone]
2
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
Index
The reports and statements set out below comprise the annual financial statements presented to the council:
Page
Accounting Officer's Responsibilities and Approval 4
Statement of Financial Position 5
Statement of Financial Performance 6
Statement of Changes in Net Assets 7
Cash Flow Statement 8
Statement of Comparison of Budget and Actual Amounts 9 - 11
Accounting Policies 12 - 45
Notes to the Annual Financial Statements 46 - 86
COID Compensation for Occupational Injuries and Diseases
GRAP Generally Recognised Accounting Practice
MEC Member of the Executive Council
MFMA Municipal Finance Management Act
MIG Municipal Infrastructure Grant (Previously CMIP)
UIF Unemployment Insurance Fund
3
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
Accounting Officer's Responsibilities and Approval
The accounting officeris required by the Municipal Finance Management Act (Act 56 of 2003), to maintain adequate
accounting records and is responsible for the content and integrity of the annual financial statements and related financial
information included in this report. It is the responsibility of the accounting officer to ensure that the annual financial statements
fairly present the state of affairs of the municipality as at the end of the financial year and the results of its operations and cash
flows for the period then ended. The external auditors are engaged to express an independent opinion on the annual financial
statements and was given unrestricted access to all financial records and related data.
The annual financial statements have been prepared in accordance with Standards of Generally Recognised Accounting
Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.
The annual financial statements are based upon appropriate accounting policies consistently applied and supported by
reasonable and prudent judgements and estimates.
The accounting officeracknowledges that heis ultimately responsible for the system of internal financial control established by
the municipality and place considerable importance on maintaining a strong control environment. To enable the accounting
officer to meet these responsibilities, the accounting officer sets standards for internal control aimed at reducing the risk of
error or deficit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly
defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk.
These controls are monitored throughout the municipality and all employees are required to maintain the highest ethical
standards in ensuring the municipality’s business is conducted in a manner that in all reasonable circumstances is above
reproach. The focus of risk management in the municipality is on identifying, assessing, managing and monitoring all known
forms of risk across the municipality. While operating risk cannot be fully eliminated, the municipality endeavours to minimise it
by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within
predetermined procedures and constraints.
The accounting officeris of the opinion, based on the information and explanations given by management, that the system of
internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual
financial statements. However, any system of internal financial control can provide only reasonable, and not absolute,
assurance against material misstatement or deficit.
The accounting officerhas reviewed the municipality’s cash flow forecast for the year to 30 June 2021 and, in the light of this
review and the current financial position, heis satisfied that the municipality has or has access to adequate resources to
continue in operational existence for the foreseeable future.
The municipality is wholly dependent on the community and government for continued funding of operations. The annual
financial statements are prepared on the basis that the municipality is a going concern and that the Jozini Local Municipality
has neither the intention nor the need to liquidate or curtail materially the scale of the municipality.
The external auditorsare responsible for independently reviewing and reporting on the municipality's annual financial
statements.
The annual financial statements set out on page 5, which have been prepared on the going concern basis, were approved by
the accounting officer on 31 October 2020 and were signed on its behalf by:
Mr JA Mngomezulu
Accounting Officer
4
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
Statement of Financial Position as at 30 June 2020
Figures in Rand Note(s) 2020 2019
Restated*
Assets
Current Assets
Receivables from exchange transactions 3 35 367 918 30 663 732
Receivables from non-exchange transactions 4 12 556 623 16 796 622
VAT receivable 5 5 519 932 -
Cash and cash equivalents 6 39 950 566 39 298 914
93 395 039 86 759 268
Non-Current Assets
Property, plant and equipment 7 323 990 965 288 449 558
Intangible assets 8 507 770 757 888
324 498 735 289 207 446
Total Assets 417 893 774 375 966 714
Liabilities
Current Liabilities
Payables from exchange transactions 9 28 727 282 30 168 368
VAT payable 10 - 1 798 890
Consumer deposits 11 1 251 353 831 613
Unspent conditional grants and receipts 12 778 423 7 663 199
Provisions 13 249 941 99 746
31 006 999 40 561 816
Non-Current Liabilities
Provisions 13 10 752 643 9 625 075
Total Liabilities 41 759 642 50 186 891
Net Assets 376 134 132 325 779 823
Accumulated surplus 376 134 132 325 779 805
* See Note 47
5
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
Statement of Financial Performance
Figures in Rand Note(s) 2020 2019
Restated*
Revenue
Revenue from exchange transactions
Service charges 14 3 723 816 3 591 657
Rental of facilities and equipment 15 773 154 816 369
Interest income (trading) 16 12 642 674 7 366 345
Licences and permits 17 1 151 139 1 328 960
Recoveries 18 1 216 801 -
Other income 19 777 165 447 820
Interest received - investment 20 4 737 275 3 228 168
Total revenue from exchange transactions 25 022 024 16 779 319
Revenue from non-exchange transactions
Taxation revenue
Property rates 21 27 700 145 24 277 688
Transfer revenue
Government grants & subsidies 22 221 513 797 206 314 761
Public contributions and donations 23 22 317 561 17 059 608
Fines, Penalties and Forfeits 24 1 078 176 1 324 700
Total revenue from non-exchange transactions 272 609 679 248 976 757
Total revenue 297 631 703 265 756 076
Expenditure
Employee related costs 25 (95 438 888) (80 688 380)
Remuneration of councillors 26 (14 323 746) (13 826 469)
Depreciation and amortisation 27 (19 233 449) (15 732 151)
Impairments of Assets 48 (48 527) -
Finance costs 28 (345 417) (1 134 394)
Debt Impairment 29 (15 150 922) (6 962 838)
Contracted services 30 (20 181 142) (21 977 611)
Transfers and Subsidies 31 (21 869 274) (20 600 177)
Loss on disposal of assets and liabilities 32 (951 633) (8 508 766)
Actuarial losses 13 (695 962) (334 304)
General Expenses 33 (59 038 434) (49 501 104)
Total expenditure (247 277 394) (219 266 194)
Surplus for the year 50 354 309 46 489 882
* See Note 47
6
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
Statement of Changes in Net Assets
Accumulated Total net
Figures in Rand surplus assets
Opening balance as previously reported 280 491 474 280 491 474
Adjustments
Prior year adjustments Note 47 (1 201 551) (1 201 551)
Balance at 01 July 2018 as restated* 279 289 923 279 289 923
Changes in net assets
Surplus for the year 46 489 882 46 489 882
Total changes 46 489 882 46 489 882
Restated* Balance at 01 July 2019 325 779 823 325 779 823
Changes in net assets
Surplus for the year 50 354 309 50 354 309
Total changes 50 354 309 50 354 309
Balance at 30 June 2020 376 134 132 376 134 132
Note(s)
* See Note 47
7
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
Cash Flow Statement
Figures in Rand Note(s) 2020 2019
Restated*
Cash flows from operating activities
Receipts
Property Rates received 26 554 627 16 415 081
Rental of facilities 842 362 1 044 266
Grants received 221 959 959 206 935 000
Interest income 4 744 618 3 228 168
VAT received 2 133 566 9 401 280
Service charges 1 842 143 1 699 695
Other cash item 2 555 204 2 152 303
260 632 479 240 875 793
Payments
Employee costs (109 767 808) (94 514 849)
Suppliers (116 695 336) (95 084 028)
Finance costs (310 356) (1 134 394)
(226 773 500) (190 733 271)
Net cash flows from operating activities 34 33 858 979 50 142 522
Cash flows from investing activities
Purchase of property, plant and equipment 7 (33 065 256) (24 976 473)
Purchase of other intangible assets 8 (142 071) (95 503)
Net cash flows from investing activities (33 207 327) (25 071 975)
Net increase/(decrease) in cash and cash equivalents 651 652 25 070 547
Cash and cash equivalents at the beginning of the year 39 298 914 14 228 367
Cash and cash equivalents at the end of the year 6 39 950 566 39 298 914
* See Note 47
8
Jozini local Municipality
(Registration number KZN 272)
Trading as Jozini Local Municipality
Annual Financial Statements for the year ended 30 June 2020
Statement of Comparison of Budget and Actual Amounts
Budget on Accrual Basis
Approved Adjustments Final Budget Actual amounts Difference Reference
budget on comparable between final
basis budget and
Figures in Rand actual
Statement of Financial Performance
Revenue
Revenue from exchange
transactions
Service charges 3 146 904 578 738 3 725 642 3 723 816 (1 826) Refer to Note
46
Rental of facilities and equipment 862 812 (13 694) 849 118 773 154 (75 964) Refer to Note
46
Interest Income (trading) 10 000 000 3 325 116 13 325 116 12 642 674 (682 442) Refer to Note
46
Licences and permits 1 269 704 6 260 1 275 964 1 151 139 (124 825) Refer to Note
46
Recoveries - - - 1 216 801 1 216 801
Other income - (rollup) 487 988 528 671 1 016 659 777 165 (239 494) Refer to Note
46
Interest received - investment 3 500 000 1 270 113 4 770 113 4 737 275 (32 838) Refer to Note
46
Total revenue from exchange 19 267 408 5 695 204 24 962 612 25 022 024 59 412
transactions
Revenue from non-exchange
transactions
Taxation revenue
Property rates 31 522 556 (3 902 942) 27 619 614 27 700 145 80 531 Refer to Note
46
Transfer revenue
Government grants & subsidies 232 522 000 3 700 000 236 222 000 221 513 797 (14 708 203) Refer to Note
46
Public contributions and - - - 22 317 561 22 317 561
donations
Fines, Penalties and Forfeits 113 809 1 387 663 1 501 472 1 078 176 (423 296) Refer to Note
46
Total revenue from non- 264 158 365 1 184 721 265 343 086 272 609 679 7 266 593
exchange transactions
Total revenue 283 425 773 6 879 925 290 305 698 297 631 703 7 326 005
Expenditure
Personnel (87 773 687) (3 635 699) (91 409 386) (95 438 888) (4 029 502) Refer to Note
46
Remuneration of councillors (14 832 073) 1 054 007 (13 778 066) (14 323 746) (545 680) Refer to Note
46
Depreciation and amortisation (18 000 000) 260 577 (17 739 423) (19 233 449) (1 494 026) Refer to Note
46
Impairment loss/ Reversal of - - - (48 527) (48 527)
impairments
Finance costs - (1 750 000) (1 750 000) (345 417) 1 404 583 Refer to Note
46
Debt Impairment (25 073 982) 9 062 829 (16 011 153) (15 150 922) 860 231 Refer to Note
46
9