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:

  1. A definition of the composition of “Contracted Services.” 
  2. What the reasons are for this shockingly poor performance on the part of management.
  3. What corrective steps have been taken.
  4. What planning together with a time frame has been put in place to rectify and prevent a recurrence.
  5. What has been done to hold those responsible accountable and the outcome thereof, alternatively,
  6. 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

  • What heading was this reported under last year for comparison?
  • What was this expenditure for?

Civil Engineering Services  2019 – R33.3 million   2018 – R21.7 million

  • What was this spent on?

Electrical Engineering Services  2019 – R2.7 million   2018 – R332,451

  • What was this spent on?

Legal advice and litigation  2019 – R7.5 million   2018 – R6.3 million

Provide a list of the matters.

We look forward to your reply.

Kind regards,

Peter Gaylard