Harry Gwala (DC43)

Municipal Performance Review - 2021 Q4

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Key Financial Ratios

Description Norm Municipality Provincial Average National Average
Collection Ratio > 95% 192.1 23.8 53.0
Capital Expenditure to Total Expenditure 10-20% 34.8 13.7 12.5
Remuneration to Total Operating Expenditure 25-40% 40.3 30.1 31.1
Budget Implementation: Capital Expenditure 95-100% 83.0 95.8 80.3

Municipality achieved a collection ratio above the norm. This has a positive impact on liquidity and all efforts should be maintained to further improve liquidity and sustainability. The Capital Expenditure to Total Expenditure ratio is above the norm. Maintaining capital expenditure at this rate could result in liquidity risk.
The Budget Implementation for Capital Expenditure is below the acceptable norm. This is an indication of possible inefficiencies in the budgeting process, capital project implementation and management and cash management.

Financial Performance

The municipality achieved an operating deficit (excluding Capital Transfers) which increases the dependency on subsidies and grants in order to remain sustainable.

Description Planned Actual YTD Variance Variance %
Operating Revenue R533.1M R511.6M R-21.5M -4.0%
Operating Expenditure R596.1M R521.8M R-74.3M -12.5%
Net Surplus / Deficit R-62.9M R-10.2M R52.8M -83.8%
Capital Transfers R301.4M R302.9M R1.5M 0.5%
Net Surplus / Deficit - After Capital Transfers R238.4M R292.7M R54.2M 22.7%

Capital Expenditure

The municipality implemented 83 % of the planned capital expenditure as at the end of the 4th Quarter. The Net Margin of 57.2% as well as the funding sources influenced the municipality’s ability to spend the planned capital.

The highest capital expenditure occurred in the 2nd quarter and represents 30.9% of the total capital expenditure YTD.

Description Planned Actual YTD Variance Variance %
Capital Expenditure R335.5M R278.4M R-57.2M -17.0%

Source of Funding

National Government made the highest contribution to capital expenditure for the YTD and accounted for 88.4%

Cash Flow

Description Planned YTD Actual Variance Variance %
Cash Flow from Operating Activities R296.3M R-103.0M R399.3M -134.8%
Cash Flow from Investing Activities R-335.5M R-233.3M R-102.2M -30.5%
Cash Flow from Financing Activities R0.2M R-0.1M R0.3M -177.7%
Net Cash Flow R-39.1M R-336.4M R297.3M 760.4%

Debtors Ageing

The municipality has a total outstanding debtors balance of R231.2M with total bad debt written off of R0.0M and impairment of debt amounts to R0.0M.

Debtors Ageing by Customer Group

Description Current 30 Days 60 Days Over 90 Days Total Bad Debt Impairment
Organs of State R3.0M R1.4M R0.7M R5.6M R10.6M R0.0M R0.0M
Commercial R0.7M R1.0M R0.4M R12.4M R14.4M R0.0M R0.0M
Households R3.4M R3.7M R3.5M R195.5M R206.2M R0.0M R0.0M

Debtors Ageing by Income Source

Description Current 30 Days 60 Days Over 90 Days Total Bad Debt Impairment
Water R4.1M R3.3M R2.7M R129.1M R139.1M R0.0M R0.0M
Electricity R0.4M R0.6M R0.2M R8.0M R9.3M R0.0M R0.0M
Waste Water Management R1.6M R1.3M R1.1M R50.4M R54.4M R0.0M R0.0M
Waste Management R0.2M R0.2M R0.1M R3.1M R3.6M R0.0M R0.0M
Interest on Arrear Debtor Accounts R0.7M R0.5M R0.5M R21.6M R23.3M R0.0M R0.0M
Recoverable unauthorised, irregular or fruitless and wasteful Expenditure R0.1M R0.1M R0.0M R1.3M R1.5M R0.0M R0.0M

Creditors Ageing

The municipality has a total outstanding creditors balance of R3.3M with total outstanding more than 90 days of R0.0M(0.1%).

Description Current 30 Days 60 Days Over 90 Days Total
Trade Creditors R3.3M R0.0M R0.0M R0.0M R3.3M


Disclaimer: The analyis was caried out on the Quarter 4 Reports obtained from National Treasury and they are publically available. We do not provide any assurance on the accuracy of the data, reporting or analysis.