South African Local Government Association
Schedule 3A public entity i.t.o. the Public Finance Management Act, 1999 and recognised i.t.o. the
Organised Local Government Act, 1997
Annual Financial Statements for the year ended 31 March 2017
Notes to the Annual Financial Statements
2017
Figures in Rand
34.
2016
Risk management (continued)
Price risk
The entity’s exposure to price risk is limited to the effect that inflation has on the market prices for
goods and services ordinarily procured by the organisation. The risk arises when the entity’s revenue
does not escalate at a similar or better rate that the prevailing market conditions, this is rare since the
entity’s major source of revenue is its membership levies which due to the basis of deriving the levy
amount normally escalates at a rate higher or equivalent to the prevailing inflationary trends.
Other than membership levies adjusted annually, there are no special mechanisms employed by
management to manage this kind of risk other than pursuing a fair market value/price through a
‘dip-stick’ in the market viz. sourcing formal price quotations and open tenders per the organisations
SCM policy.
35.
Going concern
We draw attention to the fact that at 31 March 2017, SALGA had accumulated surpluses of R151 388 094
and that the entity’s total assets exceed its liabilities by R153 647 660 indicating that the organisation
is solvent.
The annual financial statements have been prepared on the basis of accounting policies applicable
to a going concern. This basis presumes that funds will be available to finance future operations and
that the realisation of assets and settlement of liabilities, contingent obligations and commitments
will occur in the ordinary course of business.
The ability of SALGA to continue as a going concern is dependent on a number of factors. The most
significant of these is the recognition of SALGA by the Minister of Co-operative Governance and
Traditional Affairs in terms of the Organised Local Government Act, 1997 (Act No. 52 of 1997) as the
sole voice of local government.
36.
Events after the reporting date
There are no material facts or circumstances that have arisen between the reporting date and the
date of approval, which affect the financial position of SALGA as reflected in these annual financial
statements.
37.
Fruitless and wasteful expenditure
Opening balance
Fruitless and wasteful expenditure
Less: Fruitless and wasteful expenditure recouped
Over-recovery of fruitless and wasteful expenditure
Less: Fruitless and wasteful expenditure (condoned)
-
91 965
(100 695)
100 695
(91 965)
-
-
5 996
(380)
-
(5 616)
-
Fruitless and wasteful expenditure amounting to R91 965 (2016: R5 616) was incurred during the
financial year.
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