Municipal Budget Performance Report: May 2021

The report provides an overview of the performance of municipal budgets as of May 31, 2021, focusing on compliance, financial performance, key findings, capital expenditure, conditional grants, outstanding debtors and creditors, bulk services debt, Covid-19 spending, and other related matters. It highlights challenges such as incorrect use of financial systems, non-compliance issues, and the need for accurate reporting. Overall compliance stands at 55.5%, with data string submissions at 82.6% while supporting returns submission remains a challenge at 25.4%. The report emphasizes the importance of accurate data submission and the enforcement of financial management practices.

• Municipal Budget
• Performance Report
• Compliance
• Financial Management
• Local Government

whiteman_b Follow

Uploaded on Sep 29, 2024 | 0 Views

Download Presentation

Please find below an Image/Link to download the presentation.

The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.

Presentation Transcript

1. Status on Performance of Municipal Budgets as at 31 May 2021

2. Presentation Outline Reporting Formats Compliance Financial Performance & Key Findings Capital Expenditure & Key Findings Conditional Grants & Key Findings Outstanding Debtors & Key Findings Outstanding Creditors & Key Findings Bulk Services debt: Eskom (as at 31 May 2021) Sedibeng (as at 31 May 2021) Bloem Water (as at 31 May ary 2021) Rand Water (as at 31 May 2021) Covid-19 Spending Other MFMA Related Matters Municipalities meeting criteria for determining serious financial problems in terms of section 138 & 140 of the MFMA 2

3. Reporting Formats Monthly reports are prepared by using the figures from the mSCOA data strings only. The credibility of the information contained in the mSCOA data strings is still a concern. At the core of the problem is: The incorrect use of the mSCOA and municipal accounting practices by municipalities; A large number of municipalities are not budgeting, transacting and reporting directly in or from their core financial systems. Instead they prepare their budgets and reports on excel spreadsheets and then import the excel spreadsheets into the system. Often this manipulation of data lead to unauthorised, irregular, fruitful and wasteful (UIFW) expenditure and fraud and corruption as the controls that are built into the core financial systems are not triggered and transactions go through that should not; and Municipalities are not locking their adopted budgets and monthly reporting periods on their financial systems at month-end to ensure prudent financial management. To enforce municipalities to lock their budgets and close their financial system at month-end, the Local Government Portal will be locked at the end of each quarter. System vendors were also requested to build this functionality into their municipal financial systems. The responsibility lies with the municipality BEFORE submitting the data strings to ensure that the data is an accurate reflection of the state of municipal finances. 3

4. Compliance - Overall compliance = 55.5% - Although data strings are submitted (82.6%), submission of supporting returns remains biggest challenge (25.4%) - Non-compliance due to: o System challenges o Non-commitment by municipal officials to adhere to changing reporting requirements - Non-compliance communicated with defaulting municipalities - Support provided where applicable mSCOA Data String Submission Other Reporting Additional Reporting * M11 N/A Municipality C- Debt Return M11 ORGB PROR ADJB PRAD M11 CR11 DB11 schedule M11 1 1 1 1 1 1 1 1 Mangaung Letsemeng Kopanong Mohokare Xhariep Masilonyana Tokologo Tswelopele Matjhabeng Nala Lejweleputswa Setsoto Dihlabeng Nketoana Maluti a Phofung Phumelela Mantsopa Thabo Mofutsanyana Moqhaka Ngwathe Metsimaholo Mafube Fezile Dabi *Additional Reporting: Invoices outstanding over 30 days; 3rd party payments; councillor debt 1 N/A 1 1 1 1 1 1 N/A 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 N/A 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 N/A 1 1 1 1 N/A Successful 1st Phase error 2nd Phase error Outstanding 4

5. Financial Performance Summary - Table C4 Monthly Budgeted Financial Performance ( All ) for period ending (M11) 31 May 2021 Budget year 2020/21 Description Original Budget Adjusted Budget Q1 Sept Actual Q2 Dec Actual Q3 Mar Actual M10 Apr Actual M11 May Actual M12 June Actual Q4 June Actual R thousands YTD Actual % Revenue By Source Property rates Service charges - electricity revenue Service charges - water revenue Service charges - sanitation revenue Service charges - refuse revenue Rental of facilities and equipment Interest earned - external investments Interest earned - outstanding debtors Dividends received Fines, penalties and forfeits Licences and permits Transfers and subsidies Other revenue Gains Total Revenue (excluding capital transfers and contributions) Expenditure By Type Employee related costs Remuneration of councillors Debt impairment Depreciation and asset impairment Finance charges Bulk purchases - electricity Inventory consumed Contracted services Transfers and subsidies Other expenditure Losses Total Expenditure 2,819,711 5,765,683 2,665,623 1,038,480 691,127 91,169 60,346 1,009,630 126,248 4,504,652 1,387,892 56,521 20,224,258 2,656,939 5,733,037 2,665,983 1,016,274 663,946 89,839 59,104 974,686 101,116 5,231,586 1,389,982 56,561 20,646,606 707,986 1,425,571 564,070 239,619 147,844 18,911 17,181 157,208 6,324 1,448,143 322,800 5,056,333 547,230 1,178,404 620,952 210,099 148,810 18,900 15,751 216,106 2,217 1,618,112 253,495 4,830,903 674,270 1,131,487 654,118 252,570 157,243 17,877 12,940 263,303 2,958 1,401,263 320,263 4,889,178 208,565 354,989 210,443 82,211 51,387 5,625 3,398 81,852 3,179 45,476 32,120 234,670 376,693 224,553 81,671 51,507 5,957 8,111 86,176 2,713 63,486 (71,646) 2,078,390 3,142,414 443,235 731,682 434,996 163,882 102,893 11,583 11,509 168,027 5,893 108,963 (39,526) 2,078,390 4,222,204 2,372,721 4,467,144 2,274,137 866,170 556,791 67,270 57,382 804,644 17,392 4,576,482 857,031 2,079,031 18,998,619 89.3% 77.9% 85.3% 85.2% 83.9% 74.9% 97.1% 82.6% 21.8% 17.2% 52.4% 87.5% 61.7% 3675.7% 92.0% 4,966 5,005 115 302 260 404 10 413 1,090 2,211 2,547 367 448 254 141 123 265 1,334 192 75 373 1,079,790 - 6,295,892 328,138 2,463,413 1,285,496 953,932 4,501,125 1,987,824 1,437,615 232,847 1,258,670 21,390 20,766,342 6,343,240 328,618 2,415,316 1,218,617 608,870 4,520,316 1,847,023 1,837,108 264,626 1,512,345 19,635 20,915,714 1,472,031 61,192 661,119 34,287 18,706 859,027 222,477 234,814 20,846 266,634 3,851,212 1,429,652 67,091 389,292 62,478 63,651 600,347 536,378 474,296 23,196 289,810 3,936,196 1,492,628 75,432 256,696 611,885 34,128 733,446 411,565 436,594 25,462 305,217 4,383,158 544,008 26,887 (1,438) 77,353 27,802 190,297 110,890 175,247 9,344 107,244 538,748 24,624 14,213 79,250 12,757 283,196 122,006 149,863 8,023 90,572 1,082,756 51,511 12,775 156,603 40,559 473,493 232,896 325,110 17,367 197,816 5,477,068 255,225 1,319,882 865,253 157,044 2,666,312 1,403,316 1,470,814 86,871 1,059,477 14,761,453 86.3% 77.7% 54.6% 71.0% 25.8% 59.0% 76.0% 80.1% 32.8% 70.1% 1.0% 70.6% 79 7 106 192 1,267,634 1,323,253 - 2,590,887 Surplus/(Deficit) Transfers and subsidies - capital (monetary allocations) (National / Provincial and District) Transfers and subsidies - capital (monetary allocations) (Nat / Prov Departm Agencies, Households, Non-profit Institutions, Private Enterprises, Public Corporatons, Higher Educ Institutions) Transfers and subsidies - capital (in-kind - all) Surplus/(Deficit) after capital transfers and contributions Taxation Surplus/(Deficit) after taxation Attributable to minorities Surplus/(Deficit) attributable to municipality Share of surplus/ (deficit) of associate Surplus/(Deficit) for the year (542,083) (269,107) 1,205,121 894,707 506,021 (187,844) 1,819,161 - 1,631,317 4,237,166 -1574.5% 37.3% 2,373,271 2,108,127 273,724 463,194 327,329 (451,671) 172,855 (278,816) 785,431 42.1% 12,033 25,000 1,868,221 12,030 73,702 1,924,752 1,480,135 910 380 1,771 202 1,168 1,017 2,185 5,028,045 5,068 380 0.5% 1,359,672 833,551 (638,347) 1,993,033 - 1,354,687 261.2% 1,868,221 1,924,752 1,480,135 1,359,672 833,551 (638,347) 1,993,033 - 1,354,687 5,028,045 261.2% 1,868,221 1,924,752 1,480,135 1,359,672 833,551 (638,347) 1,993,033 - 1,354,687 5,028,045 261.2% 5 1,868,221 1,924,752 1,480,135 1,359,672 833,551 (638,347) 1,993,033 - 1,354,687 5,028,045 261.2%

6. Financial Performance Key Findings Operating Revenue : Aggregate revenue generated (billed) amounted to R18.99 billion (92% against an adjusted budget of R20.65 billion) Service charges contribute the highest to total revenue (43%), followed transfers & subsidies (24%) and property rates (13%) Operating Expenditure: Operating expenditure amounted to R14.76 billion (70.6%) against an adjusted budget of R20.92 billion. Majority of expenditure relates to employee related cost, totaling R5.48 billion (37%), followed by bulk purchases - electricity (18%) and contracted services (10%) 6

7. Capital Expenditure Summary - Table C5 Monthly Budgeted Capital Expenditure by Functional Classification and Funding for period ending (M11) 31 May 2021 Budget year 2020/21 Description Original Budget Adjusted Budget Q1 Sept Actual Q2 Dec Actual Q3 Mar Actual M10 Apr Actual M11 May Actual M12 June Actual Q4 June Actual YTD Actual R thousands % Capital Expenditure - Functional Municipal governance and administration Executive and council Finance and administration Internal audit Community and public safety Community and social services Sport and recreation Public safety Housing Health Economic and environmental services Planning and development Road transport Environmental protection Trading services Energy sources Water management Waste water management Waste management Other Total Capital Expenditure - Functional 1,232,605 39,558 1,193,031 394,662 63,765 97,110 21,065 211,471 661,054 114,331 546,423 1,746,334 341,538 847,961 468,404 88,432 4,038,676 290,891 61,479 229,412 22,380 2,820 19,561 21,007 3,584 17,424 40,271 9,359 30,911 27,496 3,051 24,445 10,856 2,030 8,826 - 38,351 5,081 33,270 122,010 20,844 101,166 41.9% 33.9% 44.1% 15 328,831 75,091 112,632 21,981 117,746 680,212 97,174 582,738 1,762,806 320,642 871,215 492,648 78,302 3,068,926 61,361 6,749 54,611 17,476 9,687 4,839 49,061 10,591 7,411 29,938 117,605 11,552 106,054 28,268 3,347 10,952 (1,249) 15,217 16,717 1,984 3,137 3,044 8,552 16,825 4,024 3,567 8,548 - 33,542 6,008 6,704 3,729 17,100 128,347 29,633 29,907 3,464 65,095 378,268 46,166 332,102 39.0% 39.5% 26.6% 15.8% 55.3% 18.0% 55.6% 47.5% 57.0% 25 959 686 2,839 1,250 1,380 87 161 248 98,059 13,267 84,792 40,721 6,465 34,256 60,522 8,133 52,389 - 101,243 14,598 86,645 300 300 145,543 15,312 90,285 39,929 233,933 60,510 112,320 60,559 227,195 45,978 101,275 77,566 2,377 393,854 69,358 13,271 24,710 28,088 3,289 112,424 30,505 55,736 24,269 1,913 200,923 - 181,782 43,777 80,446 52,357 5,202 355,215 788,452 165,577 384,326 230,411 8,138 1,417,435 44.7% 51.6% 44.1% 46.8% 10.4% 5.8% 46.2% 17 543 4,021 6,186 62 297 297 358 246,760 421,606 154,291 - Funded by National Government Provincial Government District Municipality Transfers and subsidies - capital (monetary allocations) (Nat / Prov Departm Agencies, Households, Non-profit Institutions, Private Enterprises, Public Corporatons, Higher Educ Institutions) Transfers recognised - capital Borrowing Internally generated funds Total Capital Funding 2,512,162 2,407,153 208,099 355,303 326,552 113,286 168,589 281,875 1,171,829 46.6% 3,000 14,933 2,527,095 156,152 1,345,374 4,028,620 14,933 2,425,086 114,584 496,844 3,036,514 2,224 210,322 18,415 17,434 246,172 5,337 360,640 12,513 44,017 417,170 2,776 329,328 25,580 35,920 390,828 113,849 6,479 32,704 153,032 563 169,441 5,978 25,492 200,911 852 1,415 283,290 12,457 58,197 353,944 11,752 1,183,581 68,966 155,568 1,408,114 78.7% 46.8% 44.2% 11.6% 35.0% - - 7

8. Capital Expenditure - Key Findings Capital expenditure Total adjusted capital budget amounts to R3.07 billion. Capital expenditure as at 31 May 2021 amounts to R1.42 billion (46.2% against the budget), which is a significant under performance against the straight line projection of 92%. 56% of expenditure (R788.5 million) relates to trading services projects (i.e electricity, water, waste water and waste management) 16 Municipalities reported expenditure below 50%, low spending mainly due to incorrect reporting i.t.o mSCOA requirements. Sources of finance Sources of finance does not correspond to the capital expenditure Capital expenditure were funded mainly through capital transfers (i.e MIG, WSIG, etc.) 8

9. Conditional Grants 2020/21 Conditional Grants Municipalities Received Mun Allocated Transferred Spend Nat Spend Mun % spend 888,350 200,881 122,782 417,333 542,559 55,055 55,055 49,510 21,097 55,509 55,509 26,675 96 99,778 99,778 54,062 5,890 46,510 4,855 4,855 2,923 1,509 74,466 74,466 36,183 943 24,187 24,187 11,275 (97,484) 14,587 30,451 30,451 23,813 16,561 29,834 203,918 203,918 67,699 103,576 54,785 54,785 34,037 15,092 12,073 12,073 9,693 4,952 17,633 201,137 201,137 107,537 116,220 109,161 66,940 66,940 19,671 57,092 38,534 38,534 25,433 51,104 56,852 246,689 246,689 161,811 189,598 89,922 89,922 43,335 44,853 66,864 66,864 39,544 37,888 15,318 11,723 11,723 5,457 6,882 69,377 69,377 38,519 22,972 40,333 127,903 127,903 53,672 59,754 56,589 56,589 18,416 54,964 27,272 56,723 56,723 31,393 28,948 6,055 6,055 2,042 5,080 2,541,883 1,854,414 985,482 630,401 1,434,579 Mangaung Letsemeng Kopanong Mohokare Xhariep Masilonyana Tokologo Tswelopele Matjhabeng Nala Lejweleputswa Setsoto Dihlabeng Nketoana Maluti a Phofung Phumelela Mantsopa Thabo Mofutsanyana Moqhaka Ngwathe Metsimaholo Mafube Fezile Dabi Total 61.1% 38.3% 0.2% 46.6% 31.1% 1.3% 60.3% 98.0% 50.8% 27.5% 146.1% 54.3% 85.3% 147.5% 76.9% 49.9% 22.9% 58.7% 58.1% 46.7% 48.2% 51.0% 83.9% 56.4% Overspending reported by Lejweleputswa and Nketoana due to incorrect reporting 9

10. Conditional Grants (2) 2020/21 Conditional Grants Municipalities Received Mun Allocated Transferred Spend Nat Spend Mun % spend 18,500 18,500 8,418 8,707 29,162 29,162 26,269 5,283 40,496 54,900 54,900 33,227 9,888 46,286 80,935 80,935 49,013 16,878 41,601 6,450 2,942 8,610 8,610 12,984 3,420 797,376 797,376 437,993 122,114 500,493 4,405 4,405 1,557 5,926 192,433 192,433 118,836 131,880 188,591 249,608 249,608 110,603 12,060 112,534 9,099 9,099 2,307 690 4,500 681,019 285,453 314,157 409,386 409,386 197,259 46,155 151,940 2,541,883 1,854,414 985,482 630,401 1,434,579 Energy Efficiency & Demand Man Grant Expanded Public Works Programme Finance Management Grant Integrated National Electrification Prog Integrated City Development Grant Municipal Disaster Grant Municipal Disaster Recovery Grant Municipal Infrastructure Grant Neighbourhood Dev Partnership Grant Public Transport network Grant Regional Bulk Infrastructure Grant Rural Roads Assets Man Systems Grant Urban settlement Development Grant Water Services Infrastructure Grant Total 47.1% 138.9% 84.3% 51.4% 45.6% 150.8% 0.0% 62.8% 134.5% 98.0% 45.1% 49.5% 46.1% 37.1% 56.4% Overspending reported due to incorrect reporting 10

11. Conditional Grants- Key Findings Poor performance reported on conditional grants (52.4% spent) Incorrect use of the funding segment contribute to the low spending reported capital expenditure allocated using incorrect funding sources. Highest performing Grants (total spending on allocated amount): Municipal Disaster Grant 150.8% Expanded Public Works Programme 138.9% Neighbourhood Development Partership Grant 134.5% Public Transport Network Grant 98% 11

12. Outstanding Debtors 0-30 Days 31-60 Days 61-90 Days Over 90 Days Total Debtors Age Analysis R'000 672,606 4,108 7,992 6,584 18,684 13,933 5,916 6,317 170,563 22,756 (4) 219,481 21,683 68,345 21,234 38,757 3,939 8,758 448 163,164 43,933 62,003 151,976 42,888 300,800 1,374,735 % 9.6% 206,720 1.5% 6,108 2.0% 7,144 2.0% 7,215 0.0% 1.9% 20,467 1.2% 15,720 2.1% 5,418 5.2% 3,990 3.6% 117,328 2.6% 17,875 0.0% 3.0% 160,331 4.0% 17,035 6.1% 22,855 2.9% 15,279 2.0% 75,268 1.0% 5,210 1.7% 11,659 9.8% 3.1% 147,306 4.6% 28,819 7.3% 23,286 7.4% 54,500 5.8% 13,039 0.0% 6.6% 119,645 5.5% 654,469 R'000 % 2.9% 187,569 2.2% 5,823 1.8% 6,775 2.2% 5,665 0.0% 2.0% 18,263 1.4% 20,341 1.9% 4,930 3.3% 3,433 2.5% 106,037 2.0% 15,992 0.0% 2.2% 150,733 3.1% 16,526 2.1% 22,717 2.1% 14,309 3.9% 32,847 1.4% 5,125 2.2% 11,141 0.0% 2.8% 102,665 3.0% 27,185 2.7% 764,698 2.7% 39,668 1.8% 12,766 0.0% 2.6% 844,317 2.6% 1,303,547 R'000 % R'000 % R'000 % Mangaung Metro Letsemeng Kopanong Mohokare* Xhariep District DC 16 Total Masilonyana Tokologo* Tswelopele** Matjhabeng Nala Lejweleputswa District DC 18 Total Setsotso*** Dihlabeng Nketoana Maluti a Phofung Phumelela Mantsopa**** Thabo Mofutsanyana District DC 19 Total Moqhaka Ngwathe Metsimaholo Mafube Fezile Dabi DC 16 Total Total Debt *M08 / **M09/ ***M10 / ****M08 (2020) 2.7% 5,968,603 84.8% 7,035,498 28.1% 2.1% 261,100 94.2% 277,139 1.7% 369,136 94.4% 391,046 1.7% 307,617 94.0% 327,081 0.0% 10,194 100.0% 10,194 1.8% 948,046 94.3% 1.8% 1,080,776 95.6% 1,130,770 1.7% 267,875 94.3% 284,140 2.8% 107,635 88.7% 121,375 2.2% 4,366,635 91.7% 4,760,563 19.0% 1.8% 823,327 93.6% 879,948 0.0% 30,163 100.0% 30,160 2.1% 6,676,411 92.6% 3.0% 492,362 89.9% 547,606 2.0% 999,686 89.8% 1,113,604 2.0% 677,687 93.0% 728,509 1.7% 1,795,212 92.4% 1,942,085 1.4% 363,867 96.2% 378,141 2.1% 491,392 94.0% 522,950 0.0% 4,125 90.2% 4,573 2.0% 4,824,331 92.1% 2.8% 862,837 89.6% 962,773 90.0% 0.0% 849,987 1.9% 1,795,920 87.9% 2,042,064 1.7% 667,071 90.7% 735,764 0.0% 0.0% 18.4% 3,325,828 72.4% 5.2% 21,743,219 86.7% 1.1% 1.6% 1.3% 0.0% 4.0% 4.5% 1.1% 0.5% 1,005,461 3.5% 0.1% 7,206,956 28.7% 2.2% 4.4% 2.9% 7.7% 1.5% 2.1% 0.0% 5,237,466 20.9% 3.8% 3.4% 8.1% 2.9% 0.0% 4,590,589 18.3% 25,075,970 100.0% Municipalities highlighted in red did not submit the debtors age analysis for the month under review (previous submitted information used for consolidation purpose) 12

13. Outstanding Debtors - Key Findings Outstanding debtors at end of May 2021 amounts to R25.08 billion (compared to R24.71 billion reported end of April 2021) 5 Municipalities failed to submit the debtor s data string for March (Mohokare, Tokologo, Tswelopele, Setsoto, Mantsopa), due to system challenges experienced. Households represents the largest component of this debt at 72.2 per cent or R18.1 billion. Collection of debt owed to municipalities remains a serious challenge and impacts negatively on the financial sustainability of the municipalities. Credit control and debt collection policies are not implemented effectively and consistently, which contributes to the increase in outstanding debt. Current economic shrinking compounded by Covid-19 will certainly lead to an increase in the outstanding debt which will impact further on the municipal revenues as well as the ability of municipalities to render effective services. 13

14. Outstanding Creditors 0-30 Days 31-60 Days 61-90 Days Over 90 Days Total Creditors by type R'000 282,869 607,863 30,128 4,759 100.0% 70,481 1,121 155,653 5,312 8,659 1,166,844 % R'000 % 0.7% 66,528 1.2% 153,674 R'000 % R'000 % R'000 % Bulk Electricity Bulk Water PAYE deductions VAT (output less input) Pensions / Retirement Loan repayments Trade Creditors Auditor General Other Total Debt 3.3% 56,695 8.5% 88,836 25.1% 14,264 11.9% 25,217 20.1% 15,482 9.2% 1,091 12.6% 94,967 9.3% 11,232 19.8% 9,919 1.8% 7,534 6.5% 290,102 0.8% 8,205,691 95.3% 8,611,783 47.7% 2.1% 6,330,685 88.2% 7,181,058 39.8% 21.0% 50,308 42.0% 119,917 0.0% 0.0% 4,759 4.5% 248,183 71.0% 349,784 17.2% 7,863 64.6% 12,165 6.2% 910,713 73.6% 1,237,681 17.4% 30,387 53.5% 56,850 1.2% 452,849 95.4% 474,554 2.0% 16,236,677 90.0% 0.7% 0.0% 1.9% 0.1% 6.9% 0.3% 2.6% 0.0% 4.4% 15,637 9.0% 2,091 7.7% 76,349 1.6% 5,512 1.6% 354,927 18,048,550 100.0% Creditors Age Analysis PAYE 0-30 Days 31-60 Days 61-90 Days Over 90 Days Total R'000 5,743 100.0% 1,401 12,135 172 100.0% 1,445 100.0% 6,781 2,452 30,128 % R'000 % 0.0% 6.2% 1,188 R'000 % R'000 % 0.0% 5,743 R'000 % 4.8% Mangaung Metro Kopanong Matjhabeng Nala Thabo Mofutsanyana District Ngwathe Mafube Total Debt 0.0% 6.5% 14,423 79.5% 18,146 15.1% 5.1% 0.0% 24,885 20.8% 0.0% 0.0% 172 0.0% 0.0% 1,445 76.1% 0.0% 29,729 24.8% 0.3% 35,885 90.2% 39,797 33.2% 21.0% 50,308 42.0% 119,917 100.0% 7.7% 1,134 48.8% 11,473 46.1% 1,277 22.8% 324 6.2% 1,332 25.1% 14,264 11.9% 25,217 0.0% 0.0% 1.1% 22,624 3.3% 128 0.1% 1.2% Creditors Age Analysis Pension/Retirement 0-30 Days 31-60 Days 61-90 Days Over 90 Days Total R'000 49,363 100.0% 1,821 15,054 4 100.0% 3,076 100.0% 1,162 70,481 % R'000 % 0.0% 1.2% 1,561 R'000 % R'000 % 0.0% 49,363 14.1% R'000 % Mangaung Metro Kopanong Matjhabeng Nala Ngwathe Mafube Total Debt 0.0% 1.3% 113,400 95.9% 118,192 33.8% 31.6% 0.0% 40,910 11.7% 0.0% 0.0% 4 0.0% 0.0% 3,076 0.8% 134,784 97.5% 138,237 39.5% 4.5% 248,183 71.0% 349,784 100.0% 1.5% 1,411 36.8% 12,923 31.6% 12,934 0.8% 1,149 20.1% 15,482 0.0% 0.0% 0.8% 1,142 4.4% 15,637 0.0% 0.9% 14

15. Outstanding Creditors (2) 0-30 Days 31-60 Days 61-90 Days Over 90 Days Total Creditors Age Analysis R'000 736,262 4,323 10,432 5,489 (828) 19,417 2,037 131 159,513 37,812 73 199,565 12,131 3,223 27,174 2,666 535 5,035 1,550 52,313 29,701 80,629 45,842 12,856 (9,742) 159,286 1,166,844 % 89.7% 20,091 3.8% 2,588 1.7% 9,799 7.4% 437 -11.8% (506) 2.4% 12,317 0.0% 299 38.1% 3,310 61.9% 0.3% 7 1.7% 103,098 5.3% 6,297 6.7% 23 1.9% 113,034 71.3% 1,687 0.5% 16,599 9.7% 37,834 13.5% 80 0.2% 7,043 0.2% 555 1.7% 8,239 35.4% 17 1.7% 71,974 5.7% 27,377 5.0% 27,323 26.0% 5,112 1.8% 12,874 100.0% 5.2% 72,686 6.5% 290,102 R'000 % 2.4% 18,454 2.3% 648 1.6% 12,767 0.6% 2,741 -7.2% (384) 1.5% 15,773 0.3% 1,229 0.0% 1 1.1% 218,666 0.9% 25,021 2.1% 1 1.1% 244,919 9.9% 2,633 2.8% 2,084 R'000 % R'000 % 5.6% 820,371 R'000 % 4.5% 0.6% 3.4% 0.4% 0.0% 4.5% 0.6% 0.0% 0.2% Mangaung Metro Letsemeng Kopanong Mohokare* Xhariep District DC 16 Total Masilonyana Tokologo** Tswelopele Matjhabeng Nala Lejweleputswa District DC 18 Total Setsotso*** Dihlabeng Nketoana Maluti a Phofung Phumelela Mantsopa Thabo Mofutsanyana District DC 19 Total Moqhaka Ngwathe Metsimaholo Mafube Fezile Dabi DC 20 Total Total Debt *M08/**M09 / *** M10 2.2% 45,564 0.6% 107,308 93.4% 114,867 2.1% 588,903 94.7% 621,901 3.7% 65,682 88.3% 74,349 -5.4% 8,758 124.4% 7,041 1.9% 770,651 94.2% 818,158 1.1% 112,990 98.7% 114,518 0.0% 0.0% 44,437 99.7% 44,576 2.3% 8,954,137 94.9% 9,435,414 52.3% 3.5% 646,257 90.3% 715,387 0.1% 993 91.1% 1,089 2.4% 9,758,814 94.6% 15.5% 569 3.3% 17,019 0.3% 576,281 96.3% 598,187 0.0% 215,581 76.8% 280,670 0.2% 1,605,996 99.2% 1,619,209 0.2% 235,648 99.4% 237,184 2.7% 274,137 92.8% 295,329 21.0% 1,892 43.2% 4,377 0.6% 2,910,104 95.4% 3,051,975 16.9% 1.6% 459,895 87.5% 525,536 2.4% 1,475,777 91.0% 1,622,156 1.5% 122,427 69.5% 176,053 1.2% 693,447 95.3% 727,711 0.0% 0.0% (9,742) 1.9% 2,751,545 90.5% 3,041,715 16.9% 2.0% 16,236,677 90.0% 0.0% 5,348 4.0% 0.0% 10,316,332 57.2% 0.1% 3.3% 1.6% 9.0% 1.3% 1.6% 0.0% 0.4% 3,504 0.2% 446 2.8% 7,918 0.4% 918 2.4% 17,583 5.2% 8,565 1.7% 38,426 2.9% 2,673 1.8% 8,535 0.0% 2.4% 58,199 1.6% 354,927 2.9% 9.0% 1.0% 4.0% -0.1% 18,048,550 100.0% Municipalities highlighted in red did not submit the debtors age analysis for the month under review (previous submitted information used for consolidation purpose) 15

16. Outstanding Creditors - Key Findings Outstanding creditors at end of May 2021 amounts to R18.05 (R17.59 billion reported at the end of April 2021) 3 Municipalities failed to submit the creditors data string for May 2021; namely Mohokare, Tokologo & Setsoto. Previous reported info used for consolidation purposes. Majority of outstanding debt (87.5%) relates to bulk services, amounting to R15.79 billion. Electricity R8.61 billion and Water R7.18 billion. Debt is increasing on a monthly basis, due to inability of municipalities to pay current accounts. Total outstanding for creditors may be understated, as municipalities are not utilizing the financial system (SCM module) correctly (eg. Invoices not captured on the system and not included in the outstanding creditors) Matjhabeng contributes the highest to the total creditors, amounting to R9.44 billion, followed by Ngwathe with R1.62 billion and Maluti a Phofung with R1.62 billion. 16

17. Bulk Services Debt - Eskom Municipalities experiencing cash flow challenges due to low revenue collection. Thus, current accounts / payment agreements cannot be serviced. Section 41(2)(b) : Amounts owing and the age profile of outstanding amounts relating to Bulk Electricity Sales Name of Municipality CENTLEC MUNICIPALITY DIHLABENG LOCAL MUNICIPALITY KOPANONG LOCAL MUNICIPALITY LETSEMENG LOCAL MUNICIPALITY MAFUBE LOCAL MUNICIPALITY MALUTI A PHOFUNG LOCAL MUNICIPALITY MANGAUNG METROPOLITAN MUNICIPALITY MANTSOPA LOCAL MUNICIPALITY MASILONYANA LOCAL MUNICIPALITY MATJHABENG LOCAL MUNICIPALITY METSIMAHOLO LOCAL MUNICIPALITY MOHOKARE LOCAL MUNICIPALITY MOQHAKA LOCAL MUNICIPALITY NALA LOCAL MUNICIPALITY NGWATHE LOCAL MUNICIPALITY NKETOANA LOCAL MUNICIPALITY PHUMELELA LOCAL MUNICIPALITY SETSOTO LOCAL MUNICIPALITY TOKOLOGO LOCAL MUNICIPALITY TSWELOPELE LOCAL MUNICIPALITY TOTAL *Source: S41 Report (Eskom) May 2021 Current 3,812,772 17,708,940 5,853,355 2,883,435 8,413,845 78,395,552 126,172,204 8,073,649 3,586,514 106,263,294 25,280,970 112,068 23,779,074 17,015,664 19,981,862 12,336,381 4,782,773 12,168,813 5,934,816 6,028,258 488,584,240 16 - 30 days 31 - 60 days 61 - 90 days 90 days+ Total 3,812,772 522,967,256 7,236,421 81,721,000 156,398,084 5,985,996,679 127,364,428 229,980,130 84,860,569 3,872,848,834 25,280,970 1,367,612 476,987,135 451,804,519 1,342,767,553 419,248,185 144,784,817 17,468,571 135,573,590 46,913,807 0 0 0 0 0 0 0 16,188,118 15,160 2,923,778 15,119,994 12,358 2,443,716 7,589,172 63,205,012 372,819 7,713,376 2,584,557 49,640,273 473,950,205 1,355,548 73,470,071 131,932,864 5,773,983,373 368,599 214,037,345 75,919,114 3,716,945,267 8,462,202 462,963 32,566 0 69,949,779 418,238 155,760 2,763,724 0 6,660 0 0 0 0 0 0 0 0 0 0 0 689,937 19,125,066 8,671,968 19,255,288 46,164 1,500,000 5,299,757 260,274 241,362 147,504,373 52,642 512,966 0 0 434,082,995 426,116,886 1,286,280,299 400,768,893 136,127,287 17,250,104 6,096,747 2,289,934 84,823 0 0 0 21,547 2,864,062 2,752,789 179,987,554 13,310,236,002 14,135,382,930 126,492,891 37,891,398 0 9,070,761 Total debt is made up of Total Capital 9,639,803,146 1,405,738,458 3,089,841,326 Total VAT Total Interest 17

18. Bulk Services Debt Water Boards Sedibeng Water Principal Arrear Amount 4,061,223,795 231,606,786 Name of Municipality Current 30 days 60 days 90 days 120 days+ Total Interest Portion Matjhabeng Local Municipality Nala Local Municipality 54,810,288 4,818,707 70,279,559 6,427,973 58,744,721 5,142,352 51,448,728 4,297,076 4,004,715,775 219,564,279 178,775,277 8,643,601 4,239,999,072 240,250,387 TOTAL 59,628,995 76,707,533 63,887,072 55,745,804 4,224,280,054 4,480,249,458 4,292,830,581 187,418,878 *Source: S41 Report (Sedibeng) May 2021 Bloem Water Principal Arrear Amount 709,931,169 272,838,144 1,474,731 Name of Municipality Current 30 days 60 days 90 days 120 days+ Total Interest Portion Mangaung Metro Municipality Kopanong Local Municipality Mantsopa (Excelsior) 79,904,240 6,487,584 13,433 70,458,032 6,262,146 12,906 40,923,467 6,344,880 12,786 25,914 5,856,031 69,611 519,495,411 431,291,211 1,654,504 875,895 710,807,064 456,241,852 1,763,241 183,403,708 288,510 TOTAL 86,405,257 76,733,084 47,281,133 5,951,556 952,441,126 1,168,812,156 984,244,044 184,568,112 *Source: S41 Report (Bloem Water) May 2021 Rand Water Principle Arrear Amount Name of Municipality Current 30 days 60 days 90 days 120 days+ Total Interest Portion Metsimaholo Local Municipality Ngwathe Local Municipality 15,617,384 2,777,255 0 0 0 0 0 0 0 15,617,384 8,481,743 2,738,204 2,802,066 164,218 5,688,297 16,191 TOTAL 18,394,639 2,738,204 2,802,066 164,218 0 24,099,127 5,688,297 16,191 *Source: S41 Report (Rand Water) May 2021 18

19. Covid-19 Spending Department General Community & Social Services Tankering of Water General General General Community & Social Services Feeding of Homeless/ Food distribution Health Sanitizer Health Health - Other Community & Social Services Community & Social Services - Other Community & Social Services Chemical Toilets Community & Social Services Community and awareness campaigns Housing Provision of waste container for informal settlement Community & Social Services Cemetry sites and preparation/Cremation Community & Social Services Sanitisation of taxi ranks/ public facilities/ inner cities General Danger allowance General Travel & Subsistence Public Safety Provision for massive pauper burials Health Decontamination of affected premises Health Surgical mask - HCW Health Mask Public Safety Implementing roadblocks Housing Quarantine Facilities Health Gloves, sterile Housing Installation of VIP toilets (Informal Settements) Health Goggles/ Face-shield/Viser Public Safety Monitoring of burial sites Public Safety Identification of specific motuaries for Covid related corpse Health Disinfectants Public Safety Security Health Cost of Screening and Testing Health Cost of Mobile Testing Health Heavy duty gloves Health Cleansing costs Health Gown Health Boot covers Health Particulate respirator, grade N95 Health Apron Item General - Other R'000 179,471 % of Total 51.9% 10.7% 9.2% 7.1% 5.5% 3.5% 2.7% 2.6% 1.2% 0.8% 0.7% 0.5% 0.5% 0.4% 0.4% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% - Weekly Covid-19 report to NT (manual report) - Total spending (15 Mar 20 31 May 21) = R179.5 million - Total reported does not balance to data strings, which amounts to R24.3m from 15 Mar 2020 to date. - Municipalities are not transacting correctly within the core financial systems against all regulated segments 93,074 19,270 16,478 12,709 Overtime Sanitisation of office building Protective clothing (other general workers not only health workers) 9,852 6,257 4,923 4,743 2,087 1,426 1,300 915 825 700 636 614 600 503 309 308 299 279 250 240 176 156 150 145 81 58 30 28 20 11 7 5 5 19

20. Covid-19 Spending (2) Community & Social Services R'000 12,458 11,150 31,865 General Public Safety Housing Health Total Municipality R'000 R'000 R'000 R'000 R'000 Mangaung Xhariep District Lejweleputswa District Thabo Mofutsanyana District Fezile Dabi District TOTAL 70,148 1,476 28,177 15,372 18,191 133,364 - - - 57 - - 97 240 279 818 4,668 1,291 1,753 3,679 130 11,522 74,816 3,276 42,685 27,175 31,518 179,471 412 7,845 1,229 1,286 1,434 LEJWELEPUTSWA DISTRICT XHARIEP DISTRICT Community & Social Services R'000 12,458 Community & Social Services R'000 Public Safety Public Safety General Housing Health Total General Housing Health Total Municipality Municipality R'000 R'000 R'000 R'000 R'000 16,461 2,079 1,474 19,104 3,194 42,685 R'000 R'000 R'000 R'000 R'000 1,905 3,276 Masilonyana Tokologo Tswelopele Matjhabeng Nala Lejweleputswa TOTAL 8,473 146 1,106 15,114 144 3,194 28,177 7,988 1,876 - 57 - - - - 57 - - - - Letsemeng Kopanong Mohokare Xhariep TOTAL 1,379 354 - - 58 412 - - - - - 97 - - - 97 75 995 159 62 - 995 166 211 - 240 - - - 240 128 6 2,431 163 1,560 91 65 - 372 1,476 1,291 - 1,753 THABO MOFUTSANYANA DISTRICT Community & Social Services R'000 Public Safety FEZILE DABI DISTRICT General Housing Health Total Municipality Community & Social Services R'000 11,150 Public Safety General Housing Health Total R'000 R'000 R'000 R'000 R'000 2,152 3,052 4,309 14,607 1,144 1,434 27,175 Municipality Setstoto Dihlabeng Nketoana Maluti a Phofung Phumelela Mantsopa Thabo Mofutsanyana TOTAL 2,152 1,071 779 9,470 424 1,144 334 15,372 - - - - - - - - - - - - - R'000 R'000 R'000 R'000 R'000 1,757 7,306 15,359 7,096 31,518 1,143 1,066 4,859 839 Moqhaka Ngwathe Metsimaholo Mafube Fezile Dabi TOTAL 1,757 - - - - - - - - - - 2,463 - - 279 - - - 279 - - - 6,527 6,445 3,461 18,191 537 242 987 - 54 - 723 478 6,979 3,635 818 - 818 130 - 130 377 1,229 7,845 3,679 20

21. Other MFMA Related Matters Municipalities meeting criteria for determining serious financial problems in terms of section 138 & 140 of the MFMA S140 Triggers - Severe (Creditors >40% of Opex Budget) S140 Triggers (Creditors >2% of Opex Budget) Financial Distress 2019 Trigger Index Nr of Triggers identified Municipalities S138 Triggers Mangaung Letsemeng Kopanong Mohokare Xhariep Masilonyana Tokologo Tswelopele Matjhabeng Nala Lejweleputswa Setsoto Dihlabeng Nketoana Maluti-a-Phofung Phumelela Mantsopa Thabo Mofutsanyana Moqhaka Ngwathe Metsimaholo Mafube Fezile Dabi 2 3 4 2 3 3 4 3 4 4 - 2 4 4 4 4 4 3 4 4 3 4 1 12 High risk 6 Medium risk 21

22. Thank You 22