Draft 2018/19 Annual Report Oversight Report

The Association’s Oversight Report for the Draft Annual Report has been submitted to the Bitou Municipal Manager, Western Cape Minister of Finance, and Auditor-General.

Date: 23 February 2020

Dear Sir,

It is our understanding that the purpose of the annual report process is to report on the executive management of the municipality by producing an honest and intelligible report so that residents can evaluate their performance, obtain the necessary responses, and ultimately to hold them to account. This is pursuant to the Constitution’s founding principles which demand a government based on openness, responsiveness and accountability.

Despite the municipality’s dismissive and often rude treatment of the input we have attempted to provide, we persist with our attempts to enforce compliance with the Constitutional prerogatives and our duty and right as citizens to participate in a meaningful way in the affairs of our government. As you are aware, due to the decline in the performance of the municipality over a number of years, and the obvious absence of managerial intervention, the Ratepayers’ Association has been forced to take a closer interest in ensuring good governance and accountability.

The standard of reporting in the annual report has sharply deteriorated over the years, a trend which accelerated over the past three years. The report does not comply in many respects with the minimum requirements and is of virtually no value. or example, in the Financial Statements, it is reported that “Contracted Services” are at 14%, whereas Treasury says the maximum should be 6%. Apart from raising a large red flag, it is meaningless.

To be of any value the report itself must explain why the municipality has missed the accepted standard by more than 130% and should include the following:

A definition of the composition of “Contracted Services.”
What the reasons are for this shockingly poor performance on the part of management.
What corrective steps have been taken.
What planning together with a time frame has been put in place to rectify and prevent a recurrence.
What has been done to hold those responsible accountable and the outcome thereof, alternatively,
What steps will be taken to hold them to account, including a time frame.

Once that is achieved will the report be meaningful and achieve its purpose.

We therefore request that you take all steps within your powers to ensure that the necessary improvements are made so that future annual reportsare intelligible and fit for the purpose intended.

That said, we return to the current report.

In order to understand and participate meaningfully, the Annual Report needs to address as a minimum the issues below found on pages 67-69 of the Financial Statements in the 2018/2019 Draft Annual Report.

Business and Advisory 2019 – R2,847,566 2018 – 0

Please provide a definition.
What was this reported under in the past for comparison purposes?

Burial Services 2019 – R123,581 2018 – R71,000

Explain the large increase.
Is the expenditure within the municipal mandate?
What is planned to control the expenses in future?

Researcher 2019 – R677,096 2018 – 0

What heading was this reported under in the past for comparison purposes?
Research field?
Why was permanent staff not used?

Town planner 2019 – R1,6 million 2018 – R174,027

What is this for?
Why the massive increase?
Why was permanent staff not used?

Event promoters 2019 – R1 million 2018 – 0

What heading was it reported under in the past for comparison purposes?
What events?
Why this magnitude of expenses contrary to Treasury guidelines?
What corrective steps are to be taken?

License fees 2019 – R10.2 million 2018 – R3.3 million

What licences?
Explain the magnitude of the increase.
What are the corrective measures?

Skills Development Levy 2019 – R1.8 million 2018 – R57,183

Report on and compare to reimbursements from SETA.
Was a skills plan and training report done and submitted?

Membership fees and subscriptions 2019 – R4.7 million 2018 – R2.1 million

What is this comprised of?
Why this magnitude of increase?

Building contractors 2019 – R5 million 2018 – 0

What heading was it reported under in the past for comparison purposes?
Which buildings?
Why the magnitude of increase?

Cleaning services 2019 – R1.16 million 2018 – R20,340

What does this relate to?
Why the increase?

Illegal dumping 2019 – R1.74 million 2018 – 0

What exactly does the heading mean?
What heading was it reported under in the past for comparison purposes?
Why the increase?

Could indicate non- or poor performance of enforcement. If so what corrective and accountability measures have been taken or planned?

Litter picking 2019 – R448,505 2018 – R196,347

Definition?
Why the large increase?
Is this extra grant funding? EPWP?

Bldg refuse removal 2019 – R716,657 2018 – 0

What heading was it reported under in the past for comparison purposes?

Learnerships/Internships 2019 – R9.1 million 2018 – R8.8 million

Is this EPWP funding? Was EPWP funding also included in the cleaning up expenditures above?

Maintenance of buildings and facilities 2019 – R5.9 million 2018 – R2.4 million

Where was this spent?

Maintenance of Unspecified Assets 2019 – R11.7 million 2018 – R3.6 million

What are the “unspecified” assets? What was this spent on?

Travel – local 2019 – R1.8 million 2018 – R1.2 million

Why the large increase?

Treasury Cost Containment Guidelines say to limit travel.

Fuel & Oil 2019 – R8.3 million 2018 – R7.3 million 2016 – R1.2 million

Last year you attributed the huge increase to aviation fuel being included in the figure. But this year the airport had no aviation fuel for at least half the year, so why does fuel expenditure keep increasing?
Please provide a break-down of where the fuel is being used.

Contracted Services:

Fire services 2019 – R604,395 2018 – 0