It is the responsibility of the accounting officer to ensure that the financial statements fairly reflect the state of affairs of the municipality as at the end of the financial year and the results of its operations and cash flow for the period then ended. 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. The accounting officer is 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 can be relied upon for the preparation of the financial statements.
The financial statements have been prepared based on the fact that the municipality is a going concern and that the Jozini Local Municipality has neither the intention nor the need to liquidate or materially reduce the size of the municipality. Although the accounting officer is primarily responsible for the municipality's financial affairs, they are supported by the municipality's external auditors. The external auditors are responsible for the independent review and reporting of the municipality's financial statements.
The accounts have been audited by the municipality's external auditors and their report is presented on page. The audit committee is convinced that the internal audit function is effective and that it has addressed the risks associated with the municipality and its audits.
Cash Flow Statement
Statement of Comparison of Budget and Actual Amounts
Accounting Policies
Basis of presentation
- Property, plant and equipment Initial Recognition
- Property, plant and equipment (continued) Office equipment
- Intangible assets
- Financial instruments
- Financial instruments (continued) Investments
- Leases
- Leases (continued) Municipality as a lessee
- Impairment of cash-generating assets
- Share capital / contributed capital 1.7 Employee benefits
- Employee benefits (continued)
- Provisions and contingencies
- Revenue
- Impairment of assets
- Unauthorised expenditure
- Irregular expenditure
- Irregular expenditure (continued)
- Budget information
- Related parties
- Retirement benefits
If the fair value of the acquired item could not be determined, the deemed cost is the carrying amount of the asset or assets given up. When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the revaluation is adjusted in proportion to the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation is equal to the revalued amount. Property, plant and equipment are derecognised when the asset is disposed of or when no further economic benefits or service potential are expected from using the asset.
For financial instruments that are not measured at fair value through surplus or deficit, transaction costs are included in the initial measurement of the instrument. The carrying amount of the asset is reduced through the use of a provision, and the amount of the shortfall is recognized as a surplus or shortfall within operating expenses. Impairment is a loss of the future economic benefits or service potential of an asset in addition to systematically recognizing the loss of the asset's future economic benefits or service potential through depreciation (amortization).
Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Other long-term employee benefits are employee benefits (other than post-employment benefits and termination benefits) that must not be settled within twelve months of the end of the period in which the employees provide the related service. Short-term employee benefits are employee benefits (other than termination benefits) that must be settled within twelve months of the end of the period in which the employees provide the related service.
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date. If the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation. If any such indication exists, the municipality estimates the recoverable service value of the asset.
If it is not possible to estimate the amount of recoverable service of the individual asset, the amount of recoverable service of the cash-generating unit to which the asset belongs is determined. If the amount of recoverable service of an asset is less than its book value, the book value of the asset is reduced to the amount of recoverable service. Expenses are classified according to the nature of the expense and when recovered, are then accounted for as income in the statement of financial performance.
Receivables from exchange transactions
Contributions to fund liabilities for the payment of pension benefits are charged against income in the year they become payable. Defined benefit funds, which are administered on a provincial basis, are actuarially valued every three years, based on the projected unit credit method. Identified deficits are recognized as a liability and are recovered through lump sum payments or increased future contributions on a proportional basis for all participating municipalities.
Specific actuarial information regarding individual participating municipalities is not available due to centralized administration of these funds. Accordingly, defined benefit plans are accounted for as if they were defined contribution plans.
Receivable from non-exchange transactions Gross balances
Receivable from non-exchange transactions (continued) Councillors Debtors
General expenses
Property, plant and equipment
Property, plant and equipment (continued) Reconciliation of property, plant and equipment - 2012
Intangible assets
Payables from exchange transactions
Provisions
Unspent conditional grants and receipts
Total revenue (continued)
Government grants and subsidies Operating grants
- Government grants and subsidies (continued)
- Government grants and subsidies (continued) MSIG grant
- Other income
- Employee related costs
- Employee related costs (continued)
- Remuneration of councillors
- Net cash flow from operating activities
- Contingencies Contingent liabilities
- Prior year error
- Prior year error (continued)
- Unauthorised expenditure
- Deviation from SCM procedures ( in terms of section 36) of Municipal supply chain management regulation Deviations
- Additional disclosure in terms of Municipal Finance Management Act Audit fees
- Rental of facilities and equipment Facilities and equipment
- Related parties
- Investment revenue Interest revenue
The project is now underway and should be completed in October according to the SLA and project plan. Permission has since been received from DSR to roll over the unused grant into the 2013/2014 financial year. The project has been completed and an application has been submitted to COGTA to use the remaining amount for the project of a similar nature.
This project has been completed and an application has been submitted to COGTA to use the balance of funds for a project of a similar nature. The balance of the funding will be used to investigate an alternative energy source to support JVAC. The initial project has already been completed and the municipality is awaiting the approval of additional funds to complete the second phase of the project which is the construction process, the balance of funds will be used for this purpose.
The library's operating requirements are of an ongoing nature, and permission has been received to transfer the grant to the financial year 2013/2014 from the Department of Art and Culture. This subsidy has been fully used in the 2012/2013 financial year, and the remaining amount is the savings. The project has been completed and an application has been submitted to COGTA to utilize the remaining amount for the project of a similar nature.
Meanwhile, COGTA received approvals to transfer the unused grant to the 2013/2014 fiscal year. The project was completed and an application was submitted to COGTA to use the fund balance for a project of a similar nature. Construction of the animal barn is now complete, while COGTA has received an application to transfer and use the fund balance for the operational needs of the barn in the 2013/2014 financial year.
The project is completed and the project manager submits the final report. An application must be submitted to DME to use the remaining balance of the project. Each is provided with an office and secretarial support at the expense of the Council.
As stated in the previous financial year 2011/2012, the total net worth was calculated incorrectly due to a casting error. During the year ended 30 June 2012, the installation of chillers was erroneously capitalized as assets instead of expensed as it does not meet the asset definition in GRAP 17.
Notes to the Financial Statements
- Risk management Capital risk management
- Reconciliation of actual amount on comparable basis to financial statements
- Reconciliation of actual amount on comparable basis to financial statements (continued)
- Comparison between budget and actual
- Comparison between budget and actual (continued)
- Comparison between original budget and budget adjustment
- Comparison between original budget and budget adjustment (continued)
Jozini Town formalization and Fresh Produced Market were received during the financial year and were therefore not budgeted.
