ANNEXURE “Al”

General Expenses - Other Total Direct Operating Expenditure

Surplus/ Deficit

OVERVIEW OF OPERATING REVENUE AND EXPENDITURE PERFORMANCE FOR THE PERIOD JULY 2013 TO DECEMBER 2013

699.707 402,892 57.6 7,620,913 3,400,749 44.6

(221,034) 323,500

Below is an analysis of the operating revenue and expenditure performance compared to the 201 3/14 approved operating budget.

Below is a discussion of the significant revenue and expenditure variations:

The statement of financial performance indicates a surplus of approximately R323.5 million. It is, however, not fully represented in cash due to the accrual basis of accounting. The statement of financial performance should not be viewed in isolation from the cash flow statement and the cash flow forecast as discussed in Annexure A3 of this report.

Revenue Variations

Rental of facilities

In order to enhance the income derived from this revenue source market related rentals should be charged relating to all Council’s properties. A report in this regard was submitted to Mayoral Committee and included in the agenda of 16/10/2013.

66

Directorate Rate and General: Infrastructure & Engineering

Original Budget Actual as at 31 R‘000 December 2013 Budget

142,049,520 49,962,402 35.2

% of

Water Services 23.5 135,111,940 31,768,838

1.3.1 Electricity losses Council resolved on 7 June 2013 that:-

The Acting Executive Director: Electricity and Energy develop and report on a strategy by 30 June 2013 to reduce electricity losses by at least 5%, from 15% to lo%, for implementation in the 2013/14 financial year, so as to achieve a minimum reduction of RlOO million in bulk electricity purchases.

144,835,810 46,O 14,589 31.8 ~ Sanitation Services

Electricity and Energy 48,344,742 16,778,327 34.7 Executive and Council 1,615,963 92,072 5.7 Safety and Security 9,814,700 3,154,5 1 0 32.1 Strategic Programmes Directorate 200,980 25,184 12.5 Total 537,635,000 168,089,523 31.3

The losses as a percentage of sales have increased in the past few years from 7% to 15%. These losses comprise both technical and non technical losses. The non technical losses have seen the biggest increase due to the theft of electricity. The Directorate has advertised a “Request for Proposals” to assist with the non- technical losses. The tender went to the Bid Adjudication Committee in December 2013 and the supplier is expected to start on 1 February 20 14.

Electricity and

Total Purchases Energy (kWh) Total Sales Energy (kW h) Losses in Units % losses or units not charged for Average Selling Price Rand value of losses

Energy Losses for 201 3/14 are as follows: Jul A w Sept Oct Nov Nov

Accum ’000 ‘000 ‘000 ‘000 ‘000 ‘000

31 7,279 305,733 277,687 297,339 292,137 1,490,175

277,753 265,587 247,289 261,525 269,257 1,321,411

39,526 40,146 30,398 35,814 22,880 168,764

12.5% 13.1% 10.9% 12.0% 7.8% 11.3%

1.01 68 1.01 68 1.01 68 1.01 68 1.01 68 1.01 68

40,l 89,874 40,820,288 30,908,561 36,415,529 23,264,290 171,598,544

1.3.2 Water losses Of concern is the increasing water losses, where the half-year target was a reduction of 0.5% whereas the first 6 months show an increase of 4.5% in losses. Inter directorate meetings are being held to confirm the credibility and accuracy of the quantity of the consumption billed, that is used to calculate the loss.

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Source of Funding

Internally Generated Funding ( Fuel Levy)

Public Contributions

Govemm ent Grants

Total

ANNEXURE “A2”

201 311 4 Actual Budget 2013114 % of Budget R,000 ‘R000

41 8,564 89,080 21.3

41,201 6,245 15.2

71 7,512 298,535 41.6 1,177,277 393,881 33.5

CAPITAL BUDGET PERFORMANCE

Below is an analysis of the capital expenditure compared to the approved 2013114 Capital Budget.

It is to be noted that an amount of R393.9million has been spent as at 31 December 2013, compared to the approved budget of R1.177 billion. This represents a spending performance of 33.5% relating to the Capital Budget.

The low spending on the Capital budget can be attributed to the following: 0 The late approval of the Ward Budget in September 2013, - directorates held back

with project implementation pending the finalising of the monetary values. 0 Meetings of the Bid Committees are being postponed, resulting in tender delays. 0 Tenders at Bid Evaluation Committee take too long to be evaluated by the

Committee. The minutes of the 6SC & BEC committees take too long to reach the project managers causing tender delays. Project delays and stoppages due to community unrest and interference by SMME’s Critical Material and Labour Contracts are not or were not in place to ensure the spending of the budget. Furthermore, the renewal of the most critical contracts are in progress and in various stages of the procurement process stages Slow spending is as a result of long delivery periods for infrastructure equipment. 0

The impact of the Capital Budget on the Municipality’s cash flow position is discussed in Annexure A3 of this report.

68 ANNEXURE “A3”

PROJECTED CASH FLOW STATEMENT FOR THE 2013/14 FINANCIAL YEAR

Projected Cash Flow Statement as at 31 December 2013

The purpose of the cash flow statement is to compare the cash inflows (receipts) with the cash oufflows (payments), so as to ascertain the adequacy of the cash inflows to cover the cash oufflows.

Table C7 Monthly Budget Statement - Cash Flow - M06 December 2013

69

The significant variances are discussed below:

Government Grants - Operatinq

0 The variance is mainly attributable to the National Treasury grants payment schedule not being available at the time of preparing the Budget.

Government Grants - CaDital

0 The variance is mainly attributable to the National Treasury grant payments schedule not being available at the time of preparing the Budget.

Rate pavers and other

a Revenue from services are only at 45.6% due to a decrease in sales. 0 The VAT claimed back from SARS for expenditure assists in the excess over the

budgeted cash flow amount that is VAT exclusive.

Supdiers and emdovees

0 TASK implementation as from December 201 3

The VAT paid to SARS for expenditure assists in the excess over the budgeted cash

0 Payments in respect of the 2012/13 financial year have been made. The cash balance as at 30 June 2013 would have incorporated the unpaid capital expenditure.

flow amount that is VAT

-_ ____

70 ANNEXURE “A4”

- Depreciation 8 asset impairment 774,430 885,807 73,829 442,982 442,902 80 O?! 885,807

8,352 48,290 94,915 (46,625) -49% 190,534 - . Financecharges 201,167 190,534

2,658.115 2,829,759 - 179,644 1,189,267 1,282,484 (93,217) -7% 2,829,759 Materials and bulk purchases

Transfers and grants - 19,714 340,520 24,738 157,962 160.063 (2,101) 340,520

NMBM BUDGET TABLES

1 Monthly Budget Tables

The seven main budget tables, as required in terms of the Municipal 8udget and Reporting Regulations, are included in this section of the report. These tables set out the Municipality’s 2013/14 budget performance for the period July 2013 to December 2013 and are to be noted by Council. Each table is accompanied by explanatory notes.

Table C l Consolidated Monthly Budget Statement Summary - M06 December 2013

71

Description

R thousands

Explanatory notes to Table C l - Monthly Budget Summary

2012113 Budget Year 201y14

Audfied Original Adjusted Monthly YearTD YearTD YTD YTD FullYear Outcome Budget Budget actual actual budget variance variance Forecast

The aim of the Budget Summary is to provide a concise overview of the actual budget performance from all of the major financial perspectives (operating expenditure, capital expenditure, financial position, cash flow, and MFMA funding compliance). The table provides an overview of the actual amounts spent compared to the monthly budget projections within the context of operating performance, resources utilised for capital expenditure, financial position, cash and funding compliance.

Table C2 Consolidated Monthly Budget Statement - Financial Performance (standard classification) - M06 December 2013

72

Explanatory notes to Table C2 - Budgeted Financial Performance (revenue and expenditure by standard classification)

The ‘standard classification’ refers to a modified Government Finance Statistics (GFS) reporting structure. The aim of the standard classification approach is to ensure that all municipalities report their operations in one common format, to facilitate comparison across all municipalities. It is to be noted that the revenue by vote as reflected in this table, includes revenue attributable to capital grants.

73

Table C3 Consolidated Monthly Budget Statement - Financial Performance (revenue and expenditure by municipal vote) - M06 December 2013

74

Surplus/@eficit) (40,804) (221,034) - 377,235 323,500 366,696 (43,196)

Explanatory notes to Table C3 - Budgeted Financial Performance (revenue and expenditure by municipal vote)

(0) (221,034)

The purpose of the format in which the monthly budget reporting table is presented, is to enable the Council to enforce a vote in accordance with the municipality’s organisational structure, so as to assign responsibility for the revenue and expenditure recorded against these votes to the Municipal Manager and Executive Directors concerned. Operating revenue and expenditure is thus presented by ‘vote’. A ‘vote’ is defined as one of the main segments into which a budget of a municipality is divided into, for the appropriation of funds.

75

2012113 Budget Year 2013414 Description Audited Original Adjusted Monthly YearTD YearTD YTD YTO Full Year

Outcome Budget Budget actual actual budget variance variance Forecast

Transfers recognised - capital 895,330 709,812 54,490 278.519 272,730 5,789 0 709,812

Contributed assets

. Contributions recognised - capital - I -

Surplus/@eficit) after capital transfers & 854,526 488,779 - 431,725 602,019 639,426 &am contributions

Taxation -

Attributable to minorities Surplusl@eficit) affer taxation 854,526 488,779 - 431,725 ~ 602,019 639,426 488,779

Surplusl@eficit) attributable to a54326 4aa,n9 - 431,725 602,019 639,426 4aa,n9 municipality

Surplus/ (Deficit) for the year ~ ~ 4 , 5 2 6 488,779 - 431,725 602,019 639,426 488,779

Share of surplus/ (deficit) of associate

Explanatory notes to Table C4 - Budgeted Financial Performance (revenue and expenditure)

The Financial Performance Budget is required to be approved concurrently by revenue source and expenditure type, so as to ensure consistency with annual reporting format requirements. A key aim is to facilitate comparison between the monthly results, the monthly budget-to-date projections and the original budget, so as to assess performance.

Table C5 Consolidated Monthly Budget Statement - Capital Expenditure (municipal vote, standard classification and funding) - M06 December 2013

76

27% 709,812

7,700 7,700

27% 717,512

National Government 895,330 709,812 102,019 298,535 235,123 63,412 Provincial Government - Other transfers and grants - - -

Transfers recognised - capital 895,330 717,512 - 102,019 298,535 235,123 63,412

1,428 6,245 8,500 (2,255) -27% 41,mi . Public contributions 8 donations 4,410 41,201 BOKOWing -

Internally generated funds Total Capital Funding

,

296,130 418,564 28,309 89,080 138,796 (49,715) -36% 418,564

i,ss,aro 1,inm - 131,756 393,861 382419 11,442 3% 1 1,1n,2n

77

Explanatory notes to Table C5 - Budgeted Capital Expenditure by vote, standard classification and funding

Table C5 is a breakdown of the capital programme in relation to capital expenditure by municipal vote; capital expenditure by standard classification; and the funding necessary to fund the capital budget, including information on capital transfers from national and provincial departments.

Table C6 Consolidated Monthly Budget Statement - Financial Position - M06 December 2013

Total current liabilities

78

Vote Description

R thousands

2012113 Budget Year 2013n4

Audited Original Adjusted YearTD Full Year Outcome Budget Budget actual Forecast

I 1

Explanatory notes to Table C6 - Budgeted Financial Position

r Vote Description

R thousands

CASH FLOW FROM OPERATING ACTMTIES

Receipts

Ratepayers and other

Government - operating

Government - capital Interest

1. The table presents Assets less Liabilities as Community Wealth. The order of items within each group is also aligned to the convention of showing items in order of liquidity; i.e. assets readily converted to cash or liabilities immediately required to be met from cash appear first.

2012113 Budget Year 2013l14

Audited Original Adjusted Monthly YearTD YearTD YTD YTD FullYear Outcome Budget Budget actual actual budget variance variance Forecast

~~-~ --_ 1

4,975,632 5,496,481 596,332 3,242,739 2,863,786 378,953 13% 5,496,481 1,270,307 1,106,417 100,088 917,612 618,479 299,133 48% 1,106,417 .

895,330 809,186 519,840 562,487 (42,647) -8% 809,186

68,224 45,240 2,888 36,583 25,971 10,612 41% 45,240 -

2. Any movement on the Budgeted Financial Performance or the Capital Budget will invariably impact on the Budgeted Financial Position. For example, the collection rate assumption will impact on the cash position of the municipality and consequently inform the level of cash and cash equivalents at year end. Similarly, the collection rate assumption informs the budget provision for debt impairment, which in turn impacts on the provision for bad debts. These budget and planning assumptions form a critical link in determining the applicability and relevance of the budget as well as the determination of ratios and financial indicators. In addition the funding compliance assessment is directly informed by forecasting the statement of financial position.

Payments

Suppliers and employees

Finance charges Transfers and Grants

NET CASH FROW(USED) OPERATNG ACTMTIES

Table C7 Consolidated Monthly Budget Statement - Cash Flow - M06 December 2013

(5,268,787) (5,934.034) (603,913) (3,757,348) (3,102,324) 655,024 -21% (5,934,034)

(205,274) (190,534) (8,021) (118,693) (91,759) 26,934 -29% (190,534)

(151 18) (25,587) (2,424) (1 1,270) (7,962) 3,308 42% (25,587)

1,720,314 1,307,169 - 84,950 829,463 868,678 (39,215) -5% 1,307,169 ,

CASH FLOWS FROM INVESTING ACTMTIES

Receipts Proceeds on dispasal of PPE Decrease (Increase) in non-

Decrease (increase) other non-

Decrease (inaease) in non-

-

current debtors

current receivables

current investments

- -

-

79

Explanatory notes to Table C7 - Budgeted Cash Flow Statement

1. The budgeted cash flow statement represents the first measurement in determining whether the budget is funded.

2. It reflects the expected cash in-flows versus cash outflows that are likely to result from the implementation of the budget.

2. Monthly Budget Supporting Tables

The supporting budget reporting tables, as required in terms of the Municipal Budget and Reporting Regulations, are included in this section of the report. The table below sets out the material variances relating to the Municipality’s financial performance for the period July 2013 to December 2013.

Supporting Table SC1 Material variance explanations - M06 December 2013

80

Financial Position Cash and Cash Equivalents 665,653

consumption levels

Mainly due to Unspnt conditional grants awaiting amroval for cam- over from National treasury. . Due to the lower than anticipated doubtful debts write-offs to date

The VAT daimed back from SARS for expendbre assists in the excess over the budgeted cash flow amount that is VAT exclusive. Timing of grant payments was not known at the time of the compilation of the budgeted cash flow statement. Timing of grant payments was not known at the time of the compilation of the budgeted cash Row statement.

Payments in respect of the 2012/13 financial year have been made. The cash balance as at 30 June 2013 would have ncorporated the unpaid capital ?xpenditure. The VAT paid to SARS for expenditure assists in he excess over the budgeted cash low amount that is VAT exclusive

~ ~~~~ ~~

No corrective action required at this stage.

No corrective action required at this stage

No corrective action required at this stage.

No corrective action required at this stage..

81

-

ANNEXURE “AS’

ANALYSIS OF THE MUNICIPALITY’S BALANCE SHEET

In this section the Municipality’s Debtors, Creditors and Investments will be analysed. These components have a significant impact on the Municipality’s financial position.

1. Overview of Outstanding Consumer Debtors (Inclusive of VAT)

Below is an analysis of the outstanding consumer debtors as at 31 December 2013 compared to the position as at 30 June 2013.

Debtors’ Age Analysis (Inclusive of VAT) as at 30 June 2013

Detail 0 - 31 - 30 Dayt 60 Dam

~-

Debtors Age Analvsir BY Income 5 ource

rade and Other I I

R 9,256,137 R 9.038.233

R 404,213249 R 118,721,019

rgans ofsfate R 8.432.723 R 14,601.177

bommercial I R 71,236,730 I R 18.799.270

wseholds R 312.753.682 R 62,609,989

R 5,850.115 R 2,710,582

R 404,273,249 RII8,72~,019

R 4,607.903 R 7,216,357 R 8,636,076 R 4,888,735 R 4,409,565 R 4.418.994 R 57209,529

R 13.106,959 R 12,794,830 R 11,951,775 R10,834.985 R 97,903,861 R 173,261.371 R 415,889,781

R 51,647,794 R 40,391,047 R 48.778.225 R47.089.786 R185,893,408 R 742,943,267 R l,512,107,2?0

NIL R 9,184,541 R 587,582 R 36,263 NIL NIL NIL

R 69,950,238 R 60,438,497 R 69,366,076 R62.811.505 RZ86206.834 R 920,623,652 R 1,991,391,070

Debtors’ Age Analysis (Inclusive of VAT) as at end of December 2013

82

I I I I

596,622,102

mans of State R l3,286,863 I R 10,345,076 1 R 5,151,594 R 4,278,943 I R 17,311,543 I R l,M5,504 R 6,388,010 R 19,214,995

The aforementioned analysis indicates that from 30 June 2013 to 31 December 2013 the overdue debts have increased to R 223.5 million as follows:

OVERDUE AMOUNTS AS AT

Income 30 June 2013 31 December 2013 Difference Debtors Aqe Analvsls By

Source Trade and Other Receivables

R 21,561,718

R 106,013,485 R 121,564,375 R 15,550,890 ransactions - Waste anagement F

I Peceivables from Exchange Transactions - Property Rental R 12,628,016

R 302,551,051

R 166,618,453 R I , ~ ~ o , I I ~ , ~ ~ I E R 14,791,950

R 354,844,004 R 158.538.887

R 2,163,935

R 52,292,955 -R 8,079,567

R 223,476,417

The credit control policy is being implemented to its fullest extent except for the component dealing with the sale in execution of both movable and immovable assets. The Municipality is currently implementing the Debt Relief Programme, as previously approved by Council.

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Detail

Bulk Electricity

Bulk Water

PAYE deductions

VAT (output less input)

Pensions I Retirement deductions

Loan Repayments

Trade Creditors

Auditor-General

OchW

Total

The increase in: Electricitv: Mainly due to the 11 large electricity consumers only paying 75% of their consumption since 1 July 2013. The NMBM appointed attorney has advised that their dispute in terms of section 102 (2) of the Municipal systems Act is not valid and therefore notices to disconnect their electricity have been issued in terms of the RMCC Credit Control policy. ;

usually only received in October due to late payments by annual ratepayers.

overdue amounts.

- Rates: This is due to annual rates being payable by the end of September each year and

Interest: This is due to the fact that interest is being raised at 16.5% per month on

0- 30 Days 31-60 days 61 - 90 days Above 91 days Total

R ‘000 R ‘000 R ‘000 R ‘000 % R ‘000

- - -

0 23.677

--_____5 - 0.0

92 0.1

0.0

82.5

859 859 0.6

0.0

3,580 141,194 100.0

- - 92

86,654 25,394 938 3,580 116,566

- - 111,282 25,394 938

2. Overview of Creditors position

Below is an analysis of the status of the major creditors:

The above amounts represent invoices still to be paid. Creditors’ payments approximate 38 days, based on the date of invoice. The target for payment days is recorded at 35 days from date of the relevant invoice to the payment date. The 38 days excludes delayed payments as a result of irregular expenditure.

A monthly report is submitted to Management Team on the outcome of the creditors’ payment process. Executive Directors are held responsible for outcomes in the following two areas: - 0 Adhering to the 19 days allocated to Directorates for processing of payments - this

currentlv forms part of the Executive Directors’ scorecards; and

0 Reporting on and being held accountable for irregular expenditure - this is dealt with through the MPAC Sub-committee on Irregular, Fruitless and Wasteful expenditure.

84

Sanitation

Special Projects & Programmes Average for all Directorates

Pavment of Service Providers

24 21 5 25 246 76 199

403 46 36 10 32 9

45 37 27

Section 65(2)(e) of the MFMA states that “all monies owing by the Municipality must be paid within 30 days of receiving the relevant invoice or statement, unless prescribed otherwise for certain categories of expenditure”.

To ensure efficient administration all reporting in relation to payment is based on using the invoice date,as the baseline and not the date of receipt of the invoice. An average number of days to make payment from the date of invoice have been calculated at 35 days, by allowing 5 days for postal travel of the invoice from supplier to the municipality.

For performance measuring purposes the 35 days has been split as follows:

’ Phase 1 - The Directorate has 19 days to process from invoice receipt date; Phase 2 - Creditors, Accountants & Cash Management have 16 days to finalise the payment process.

It must be noted that the date of receipt of invoice is inserted in the payments program by the directorate

This reporting standard is being applied due to the fact that:

Service Providers give discount based on the invoice date, irrespective of the invoice

Performance of the NMBM in relation to payment is determined by the Service receipt date.

Provider from the date of the invoice.

difficult to prove. ‘ Recording of the invoice receipt date may be subjective, impractical to manage and

85

Directorate Sanitation

Table I above illustrates by Directorate the number of days taken to process payment documentation from the date of the invoice. The Directorates are still lagging in efforts to meet the 19 days turnaround time assigned to them in Phase 1.

No. of Days ( December ) 76

The following Directorates have met the 19 days turnaround time for the latest month (December):

Number of Days taken by Accountant to sign off documentation

I

July 3 August 4 Sep tem ber 2 October 2 November 3 December 2

0 Budget & Treasury 0 Water Service

Number of Days taken by Creditors to process & final Sign Off of EFT

7 6 8 10 8 6

The following Directorates have improved for the latest month (December):

2 1 3 1 2 3

0 Recreational & Cultural Services Human Settlements Safety & Security

Economic Development ; Tourism & Agriculture

invoice 12 1 1 13 13 13 11

During December the number of days to process documentation has increased for the following Directorate(s):

The number of days taken by the Directorates to process documentation for payment remains unacceptably high and impacts negatively on the NMBM’s compliance with Section 65 (2)(e) of the MFMA. Compliance with Section 65 (2)(e) of the MFMA is dependent on all role players within the payment value chain adhering to their respective timeframes.

The previous Acting City Manager requested that this matter be urgently addressed and communications be sent to each Directorate with regard to what plans the Directorate intends putting in place to ensure compliance with Section (65)(2)(e) of the MFMA. This process commenced in August 2013.The Directorates were given a deadline to submit their plans, which was 7 October 201 3.

Table 2: Reflecting Average number of Days taken by the NMBM to pay Service Providers from the date that the EFT is available for release

EFT’S Directorate approves

Table 2 above reflects the Phase 2 process payment cycle where the target has been set at 16 days. This phase of processing is consistently within the target number of days.

Upon combining Phase 1 and Phase 2 of the payment process, the number of days taken to pay creditors from date of invoice compares as follows against the target of 35 days.

Financial Institution

Type of Investment

Value of Investment 3OJune 2013

Add: Investments Made (July to September 2013) Less: Investments Matured (July to

Net movement in current account

Value of Investments: 30 September 2013

% Exposure Of Institution Actual Interest Earned (July to September 201 3)

September 201 3)

0 July 2013 - 43 days 0 August 2013 - 55 days 0 September 20 I 3 - 47 days 0 October 2013 - 58 days

0 December 2013 - 38 days 0 November 201 3 - 50 days

Total ABSA F NB lnvestec Nedbank Nedbank Standard Stanlib ABSA

Term Term Call Term Call Term Call Current

Bank

Deposit Deposit Deposit Deposit Deposit Deposit Deposit Account R’000 R’000 R‘000 R’OOO R O O 0 R’000 R’000 R O O 0 woo0

320,000 220,000 165,607 100,ooo 165,500 239,200 35,071 335,504 1,580,882

555,000 608,500 645,000 320,000 275,000 735,000 0 0 3,138,500

-610,000 -595,000 -515,000 -280,000 -295,000 -714,200 0 0 -3,009,200

0 0 0 0 0 0 -46,307 -46,307

265,000 233,500 295,607 140,000 145,500 260,000 35,071 289,197 1,663,875

15.93 14,03 17.77 8.41 8.74 15.63 2.11 17.38 100

3,686 4,300 3,144 2,043 2,768 5,584 768 4,001 26,294

In accordance with the MFMA, invoices must be paid within 30 days of receipt of the invoice. By using the invoice receid date, as recorded by the Directorate, the number of days taken to pay creditors is as follows:

0 July 201 3 - 28 days 0 August 2013 - 32 days

September 201 3 - 25 days 0 October 201 3 - 27 days 0

November 201 3 - 26 days 0 December 2013 - 27 days

It remains the responsibility of each Directorate to ensure that Invoices are received and processed relating to service delivery within their respective directorate. The results in Table 1 indicate that the Directorates are still taking an exceptionally high number of days to process source documentation.

3. Investment Portfolio

Below is an analysis of the Investment Portfolio as at 31 December 2013

The increase in the investment portfolio since 30 June 2013 amounts to R83 million. The increase in the investment portfolio is mainly due to receipts of government grants during

87

Description

R thousands

RECEIPTS:

December 2013 in respect of the 2013/14 financial year. The following analysis indicates the extent to which the investments are committed:

Budget Year 2013114

Original Monthly YearTD YearTD YTD YTD% ' FullYear Budget actual actual budset variance variance - - - - -

Cash backed Reserves Bank Balances and Cash Short-term Investment Deposits

Armlication of Cash Unspent Conditional Grants Statutory Funds - COlD Self Insurance Fund Outstanding Creditors Liability Internally Generated Funding Current Provisions

Reserves in excess of commitments

- R'000 251,926

1,411,949 1,663,875

725,842 19,009 31,500

1 41,194 329,484 204,904

1,451,933

21 1,942

The cash backed reserves exceed the commitments at this stage by an amount of R211.9 million. The sustainability of the Municipality will remain under pressure until sufficient working capital levels have been established. The following financial strategies are being implemented to address this situation:

Operating and Capital expenditure funded from the Municipality's own revenue sources have been reduced to the financial affordability levels established in terms of the 2013/14 Budget. Optimisation of all revenue streams. Increasing collection rates above the targeted percentage utilising the credit control policy of Council and the Debt Relief Programme, integrated with the Masakhane Programme. Disposal of serviced land in order to boost the depleted Capital Replacement Reserve. No capital projects will be funded from the Municipality's own revenue sources until such time as sufficient funds are available to cover the commitments not yet funded.

4. Allocation and Grant receipts and expenditure for the 2013/14 financial year

Below is an analysis of grants received as at 31 December 2013:

Supporting Table SC6 Monthly Budget Statement - transfers and grant receipts - M06 December 2013

Below is an analysis of the spending associated with the grants as at 31 December 2013:

Supporting Table SC7 Monthly Budget Statement - transfers and grants expenditure - M06 December 2013

Note: The equitable share allocation is utilised to fund ATTP subsidies granted to qualifying households, with the remainder being used to support the Municipality’s operations.

5. Councillor and Board members’ allowances and employee benefits

Below is an analysis of Councillor, Board members’ allowances and employee benefits:

Supporting Table SC8 Monthly Budget Statement - Councillor and staff benefits - M06 December 2013

90

I-

1-

Basic Salaries and Wages

Medical Aid Contributions I Performance Bonus

Motor Vehicle Allowance

Board Fees Payments in lieu of leave

Long service awards

Senior Manasen of Entities

TOTAL MANAGERS AND STAFF 1,972,548 133,262

6. Key performance indicators

924,057 974,876 (50,820) -5% 1,972,548

The table below reflects the key performance indicators as per the 2013114 Budget and the associated performance to date.

Supporting Table SC2 Monthly Budget Statement - performance indicators - M06 December 20 13

92