Page 164 - UGU Dstrct Mun IDP Report '21-22

Accounting Practice (GRAP) i.e. GRAP 17;
• Ensure a system of internal control of assets, loans, investments and leases including registers;
• Develop and implement asset, loans, investments and leases management framework, policies, strategies, assets repairs
and maintenance plans;
• Coordination of Disposal of Fixed Assets;
• Assist with Replacement of Fixed Assets; and
• Ensure appropriate assets counts.
3.8.8 Auditor General Report
Table 3.13.8.1 gives a summary of the Auditor-General’s Report on the Ugu District Municipality Financial Management of the past three years.
Table 3.13.8.1: Summary Auditor-General’s Report 2015 - 2017
Source: Auditor-General’s Reports, 2015 – 2019
3.8.9 Supply Chain Management (SCM)
MFMA section 110 - 119; SCM Regulations 2005; and relevant MFMA circulars set out required processes and guidance manuals to help ensure that SCM arrangements provide appropriate goods and services, offer best value for money and minimize the opportunities for fraud and corruption. The Municipality’s supply chain management functions are centralised in the Budget and Treasury Office Supply Chain Management Unit. All bid committees are in place, effective and they sit as per the adopted roster of bid committees. The coordination of the procurement of goods and services, management of supplier database, inventory management and contract management are performed within the Supply Chain Management Unit. The Supply Chain Management Policy and Standard Operating Procedures are in place and will be reviewed for the 2020 / 2021 financial year.
There is an updated contract register that is populated with all contracts for the municipality. They have all been procured through the SCM process, they are all valid written contracts with the terms and conditions stipulated in the contract. The period of the contract is specified in the contract register. A contract administrator is responsible for the management of all the municipal contracts. All officials in the Supply Chain Management Unit meet the prescribed competency levels as required by the Municipal Finance Management Act (MFMA)
Demand management is managed through the Procurement Plan that was adopted annually as a working document for the Municipality. There is still a need for improvement in the following areas:
• Contracts awarded within 90 days.
• Limited or decreased irregular expenditure; and
• Skills development for the current staff in the SCM unit will always be needed since regulations change.
3.8.10 Cash Flow Management
Figure 3.13.10.1 gives a summary of the cash flow management of the Ugu District Municipality over a period of 3 years from 2017 / 2018 to 2019 / 2020 financial years. The municipality experienced a cash flow shortfall in the 2019 / 2020 financial year where the cash out flow was higher than the cash inflow. The municipality took immediate measures to ensure that the cash flow position is improved in the 2017 / 2018 financial year and is currently implementing these measures.
Financial Year
Audit Outcome
Basis for Audit Opinion
2014 / 2015
Unqualified
2015 / 2016
Unqualified
2016 / 2017
Qualified
Revenue
Assets Management
Commitments
162 UGU DISCTRICT MUNICIPALITY