When items of property, plant and equipment are financed from government grants, a transfer is made from the accumulated surplus/(deficit) to the Government Grants Reserve equal to the Government Grant recorded as revenue in the Statement of Financial Performance in accordance with a directive (budget circular) issued by National Treasury. When such items of property, plant and equipment are depreciated, a transfer is made from the Government Grant Reserve to the accumulated surplus/(deficit). In order to finance the provision of infrastructure and other items of property, plant and equipment from internal sources, amounts are transferred from the accumulated surplus/(deficit) to the CRR in terms of a Council resolution.
The cash in the designated CRR bank account can only be utilised to finance items of property, plant and equipment. The amount transferred to the CRR is based on the municipality's need to finance future capital projects included in the Integrated Development Plan. Revenue from the sale of goods is recognised when the risk is passed to the consumer.
Contributed property, plant and equipment is recognised when such items of property, plant and equipment are brought into use. Revenue received from conditional grants, donations and funding are recognised as revenue to the extent that the Municipality has complied with any of the criteria, conditions or obligations embodied in the agreement. To the extent that the criteria, conditions or obligations have not been met a liability is recognised.
Non-current provisions are discounted to the present value using a discount rate based on the average cost of borrowing to the Municipality.
CASH AND CASH EQUIVALENTS
UNAUTHORISED EXPENDITURE
IRREGULAR EXPENDITURE
FRUITLESS AND WASTEFUL EXPENDITURE
COMPARATIVE INFORMATION
LEASES
RETIREMENT BENEFITS
BORROWING COSTS
INTERNAL FINANCING OF PROPERTY, PLANT AND EQUIPMENT
MOGALE CITY LOCAL MUNICIPALITY
- Audit fees
- PAYE and UIF
- Contributions to organized local government Opening balance
- Pension and Medical Aid Deductions
- Councillor’s arrear consumer accounts
- Statutory Funds
- Provisions and Reserves Balance previously reported
- Accumulated Surplus/(Deficit) Implementation of GAMAP
- Consumer deposits
- Consumer debtors
- Creditors
These loans are repayable with interest if the the employee fails and are written off in the cases where employees pass. In terms of the Constitution, this grant is used to subsidise the provision of basic services to indigent community members. 2,016,236 This grant was used to construct roads and sewerage infrastructure as part of the upgrading of informal settlement areas (included in the roads and sewerage votes in Appendix B).
The Finance management grant is utilised in the internship programme for the payment of salaries and training of the finance interns. This grant is utilised for the construction of infrastructure and community facilities Conditions met - transferred to revenue. Conditions still to be met - transferred to liabilities (see note 6) Conditions met - transferred to revenue. The Municipality renders health services on behalf of the Provincial Government and is refunded approximately 50% of total expenditure incurred. This grant has been used exclusively to fund clinic services. included in the public health vote in Appendix D).
This grant is administrated on behalf of the Department of Housing for the erection of houses Current year receipts - included in public health vote. Conditions still to be met - transferred to liabilities (see note 6). Remuneration of the Municipal Manager. Contributions to UIF, Medical and Pension. Remuneration of the Chief Finance Officer. Remuneration of Individual Executive Directors. There were no advances to employees. Loans to employees are set out in note 10. Employee related costs - Salaries and Wages. Less: Employee costs included in other expenses. Contributions to UIF, Medical and Pension Funds. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005. Decrease)/increase in conditional grants. Each is provided with an office and secretarial support at the cost of the Council.
Cash and cash equivalents included in the cash flow statement comprise the following statement of amounts indicating financial position. The estimated liability of the funds is R200,7 million which is adequately financed by assets of R255,4 million. 43,759,117 The comparison of the Municipality’s actual financial performance with that budgeted is set out in Annexures E(1) and E(2).
The funds were written-off by Council because none of the funds were backed by cash and as a first step in the GAMAP implementation. The amount under the heading Loans Redeemed & other Capital Receipts deemed to be tandemount to accumulated depreciation for the purpouses of this Financial Statements. Grant funding of assets for the 2004/05 financial year is for purposes of Grap compliency transferred to the government grant reserve and not included in Loans Redeemed and other capital receipts.
The Municipality is in the process of itemizing all infrastructure and community assets and will calculate accumulated depreciation once this exercise has been completed by 30 June 2008. Furthermore, the Municipality has not assessed whether items of property, plant and equipment are impaired.
APPENDIX B
MOGALE CITY LOCAL MUNICIPALITY APPENDIX D
SEGMENTAL STATEMENT OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30-Jun-2005
Interest were allocated to the Consolidated Loans Fund in the budget as per pre- GAMAP standard and therefore not included in the operational budget. The interest rate is linked to the prime rate which decreased significantly during the financial year although the budget was based on previous years actual. The income for licenses and permits were incorrectly included for budget purposes as agency income.
Capital Grants utilised was not included for budget purposes as income as required in terms of GRAP. During the financial year, MLCM assets were unexpectedly disposed on auction, which were not budgeted for but drastically increased the actuals. The working capital provision is a MFMA requirement to account for the difference between levied amounts and actual receipts in order to protect the cashflow of the Council.
