The Accounting Officer is required by the Municipal Finance Management Act (Law 56 of 2003) to keep adequate records and is responsible for the content and integrity of the annual accounts and related financial information included in this report. It is the responsibility of the Accounting Officer to ensure that the financial statements give a true and fair view of the state of affairs of the Municipality at the end of the financial year and the results of its operations and cash flows for the period then ended. The financial statements have been prepared in accordance with the Standards of General Recognized Accounting Practice (GRAP), including any interpretations, guidelines and guidelines of the Accounting Standards Board.
The accounting officer recognizes that he is ultimately responsible for the system of internal financial control established by the municipality and places great importance on maintaining a strong control environment. To enable the accounting officer to fulfill these responsibilities, the accounting officer establishes standards for internal control aimed at reducing the risk of errors or deficiencies in a cost-effective manner. These controls are monitored throughout the municipality and all employees are expected to maintain the highest ethical standards to ensure that the municipality's business is conducted in a manner that is above reproach in all reasonable circumstances.
The focus of risk management in the municipality is to identify, assess, manage and monitor all known forms of risk across the municipality. The accountant is of the opinion, based on the management's information and explanations, that the internal control system provides reasonable assurance that the accounts can be used as a basis for the preparation of the annual accounts. The accountant has reviewed the municipality's cash flow forecast for the year up to 30 June 2014 and, based on this review and the current financial position, is convinced that the municipality has or has access to sufficient resources to continue operations. in the foreseeable future.
The accounting officer is not aware of any matter or circumstance that has arisen since the end of the financial year.
Statement of Comparison of Budget and Actual Amounts
Accounting Policies
Presentation of Annual Financial Statements
- Investment property
- Significant judgements and sources of estimation uncertainty
- Property, plant and equipment
- Property, plant and equipment (continued)
- Property, plant and equipment (continued) Work in progress
- Financial instruments
- Impairment of cash-generating assets
- Impairment of cash-generating assets (continued) Basis for estimates of future cash flows
- Impairment of cash-generating assets (continued) Cash-generating units
- Impairment of cash-generating assets (continued) Reversal of impairment loss
- Impairment of non-cash-generating assets
- Impairment of non-cash-generating assets (continued)
- Impairment of non-cash-generating assets (continued) Recognition and measurement
- Employee benefits
- Employee benefits (continued)
- Provisions and contingencies Provisions are recognised when
- Provisions and contingencies (continued)
- Revenue Recognition
- Borrowing costs
- Comparative information Prior year comparatives
- Unauthorised expenditure Unauthorised expenditure means
- Fruitless and wasteful expenditure
- Irregular expenditure
- Presentation of currency
- Revaluation reserve
- Conditional grants and receipts
- Presentation of budget information
- Presentation of budget information (continued)
- Related parties
When the book value of a cash-generating asset exceeds its recoverable amount, it is impaired. If the recoverable amount of a cash-generating asset is less than its book value, the book value of the asset is reduced to its recoverable amount. The book value of the cash-generating unit is determined on a basis that is consistent with the method of determining the recoverable amount of the cash-generating unit.
An impairment loss is recognized for a cash-generating unit if the recoverable amount of the unit is less than the carrying amount of the unit. The amount of the impairment loss that would otherwise be allocated to the asset is allocated pro rata to the other cash generating assets of the unit. A reversal of an impairment loss for a cash-generating asset is recognized immediately in surplus or deficit.
Any reversal of an impairment loss on a revalued cash-generating asset is treated as a revaluation increase. A reversal of an impairment loss for a cash-generating unit is allocated to the unit's cash-generating assets pro rata to the carrying amount of those assets. No portion of the amount of such chargeback shall be allocated to a non-cash-generating asset that contributes service potential to a cash-generating unit.
When the carrying amount of a non-cash generating asset exceeds its recoverable service amount, it is impaired. If any such indication exists, the municipality estimates the recoverable service amount of the asset. Value in use of non-cash generating assets is the present value of the non-cash generating assets remaining service potential.
The present value of the remaining service potential of a non-cash generating asset is determined as the depreciated replacement cost of the asset. If the recoverable service amount of a non-cash generating asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable service amount. When the estimated amount for an impairment loss is greater than the carrying amount of the non-cash-generating asset to which it relates, the municipality recognizes a liability only to the extent that is a requirement in the Standards of GRAP.
A reversal of an impairment loss for a non-cash-generating asset is recognized immediately in surplus or deficit. Any reversal of an impairment loss on a revalued non-cash-generating asset is treated as a revaluation increase.
Notes to the Annual Financial Statements
- New standards and interpretations
- Standards and interpretations effective and adopted in the current year
- Standards and interpretations issued, but not yet effective
- Investment property
- Property, plant and equipment
- Property, plant and equipment (continued) Reconciliation of property, plant and equipment - 2013
- Employee benefit obligations
- Receivables from exchange transactions
- Consumer debtors Gross balances
- Cash and cash equivalents (continued)
- Unspent conditional grants and receipts (continued) Movement during the year
- Unspent conditional grants and receipts (continued) Sport grant
- Payables from exchange transactions
- Property rates Rates received
- Other income
- General expenses
- Employee related costs
- Employee related costs (continued)
- Cash generated from operations
- Capital Commitments
- Commited in respect of Capital Expenditure Approved and contracted for
- Contingency Liability - Wage Curve Agreement
- Prior period errors
- Prior period errors (continued)
- Risk management Liquidity risk
- Risk management (continued) Credit risk
- Going concern
- Irregular expenditure
- Deviation from procurement processes
A register containing the data required under Article 63 of the Municipal Financial Management Act is available for inspection at the registered office of the municipality. The nature and size of government contributions recognized in the annual accounts are indicative of other forms of government support from which the municipality has benefited directly; And. The leave and bad debt provision represents management's best estimate of the municipality's liability in one period based on past experience.
According to the constitution, this grant is used to subsidize the provision of basic services to poor members of the community. According to GRAP 19, the municipality must disclose the potential liability in the financial statements. Since not all announcements on the municipality's organizational chart were evaluated, the municipality made it impossible to reliably measure the costs of obligations.
The following adjustments have been made to amounts previously reported in the Municipality's annual financial statements resulting from compliance with GRAP standards. During the year, the municipality discovered differences in the property register that were disclosed in the previous period. Accumulated surplus: The adjustment is an effect on the accumulated surplus of changes to facilities and equipment of the previous year for the amount of R2 244 281.11, payables from exchange transactions for the amount of R 146 039.00 and receivables from the exchange amount of 107 transactions . 447.
An amount of R146 039 in the previous financial year was paid for GRV accruals which were accrued in the current year and creditors which were understated by R1 041. An amount of R107 447 in the previous financial year was paid for advance payments that were calculated in the current year. The municipality's liquidity risk is the result of available funds to cover future obligations.
The Municipality manages liquidity risk through a continuous review of future commitments and credit facilities. Since the municipality does not have significant interest-bearing assets, the municipality's income and operating cash flows are essentially independent of changes in market interest rates. The municipality deposits cash only in major banks with high credit standing and limits exposure to any single party.
Otherwise, if there is no independent assessment, the risk control assesses the credit quality of the client, taking into account his financial position, past experience and other factors. This basis assumes that funds will be available to finance future operations and that the realization of assets and the settlement of liabilities, contingent liabilities and commitments will occur in the ordinary course of business.
Budgeted Financial Performance (revenue and expenditure) for the year ended June 30, 2013
