LEPELLE NORTHERN WATER BOARD ANNUAL REPORT 2017/18

Transcript:LEPELLE NORTHERN WATER BOARD ANNUAL REPORT 2017/18:
LEPELLE NORTHERN WATER BOARD ANNUAL REPORT 2017/18 12 March 2019 ANNUAL REPORT 2017/18 Part 1: Overview of financial performance Part 2: Overview of non-financial performance Contents annual report 2017/18 Part 1: overview of financial performance FINANCIAL PERFORMANCE STATEMENT OF FINANCIAL POSITION The Gross profit margin decrease to 48% during the year under review. Collection of outstanding debt still remain a challenge due to non-payments of account by WSA and DWS The cash flow projection made until June 2019 reflects a cash balance of R80m. These is achievable as a results of the organisation appetite to reduce cost and collect all outstanding debt. Implementation of strategies that are geared towards safeguarding of the safety margin of 1.2 liquidity status on a month to month basis 6 Ratios Expenditure outcome: 31 June 2017 Over expenditure of 2% due to increase in cost of sales which is mainly attributed from the electricity cost 35% of the cost attributed to employee cost 7 Irregular and Unauthorised expenditure 8 0% overspend 0% not within purpose of vote Extension of expired contract Non-compliance with panel selection criteria Deviations not in line with treasury guidelines Non-compliance with local content treasury procurement guideline Irregular expenditure Fruitless and wasteful expenditure Late payments to suppliers mainly SARS resulted in Interest and penalties. This is a results of cash flow constraints because of significant portion of debtors not settling their accounts timely as well as pre funding of projects implemented on behalf of DWS. Reduction of fruitless & wasteful expenditure Commitment analysis Accruals CONTIGENT LIABILITIES AND ASSETS Contingent Liabilities Contingent assets A claim of R500 000.00 was received for alleged damages to the claimant`s house flooded due to underground pipe burst A service provider was ordered to pay R100 000.00 due to loss of assets A claim of R2.5m from land claim commissioner on a farm subjected to land claim A claim of R2.8 from service provider resulting from contractual obligation Analysis: matters relating the audit report per year 15 Trend analysis: Matters related to audit report Comparative analysis Action plan 18 Part 2: OVERVIEW OF NON- FINANCIAL PERFORMANCE Explanatory notes 20 LNW INTERNAL PROJECTS DWS INTERVENTION PROJECTS WATER TARIFF 2019/20 Factors considered in the proposed tariff increase Consultation process Increase in raw water costs by the Department of Water and sanitation of 14.4% Increase in purification costs relating to contractual annual increase by 5.3% Increase in electricity costs as proposed