Governance
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Conditional donor and grant funding
raised amounts to R 25.3 million (2016: R
19.9 million).
Conditional donor and grant funding
already
secured
to
pursue
the
organisation’s mandate in the coming
year amounts to R 10.0 million (2016: R
1.3 million).
At 31 March 2017, the statement of
financial position shows that the
organisation has already secured R 5.7
million (2016: R 8.0 million) as ‘payments
received in advance’. Included in the
amount are membership levies paid
in advance by member municipalities
of R 5.7 million (2016: R 7.97 million).
The remaining R 7.0 thousand (2016: R
30.0 thousand) will be defrayed through
programme implementation.
The statement of financial position
reflects total assets of the organisation at
31 March 2017 growing at 16.4 percent to
R 259.8 million (2016: R 223.3 million).
The organisation is solvent with total assets
exceeding total liabilities by R 153.6 million
(2016: R 138.6 million) representing a R
10.8 percent increase (2016: 21.8 percent).
The solvency rate is R 2.45 times (2016:
2.64 times), this means that SALGA had a
liability of 100 cents for each 245 cents it
holds in total assets.
Total current assets stand at R 222.0
million (2016: R 187.8 million) which is
more than the current liabilities of R 99.1
million (2016: R 78.9 million).
The current ratio is 224 percent (2016:
238 percent) which means that SALGA
had R 2.24 (2016: R 2.38) in current assets
to cover every R1 of current liabilities.
The organisations operations resulted
in a surplus for the year of R 15.0 million
(2016: R 27.1 million), and the 2017/18
to 2019/20 MTEF cycle budget projects
operating surpluses in terms of the
organisational strategy.
Membership levy revenue projections for
the 2017/2018 financial year amount to
R 525.3 million representing a projected
growth of 6.1 percent. The projection for
the two outer years of the MTEF cycle is
R 562.1 million and R 599.8 million for
the 2018/2019 and 2019/2020 periods
respectively, representing a 7.0 percent
and 6.7 percent increase respectively.
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Total revenue projection over the MTEF
cycle is R 619.8 million; R 660.9 million
and R 701.7 million for the 2016/2017;
2017/2018
and
2018/2019
periods
respectively.
Other aspects considered in assessing the
organisation’s going-concern are the following:
The Constitution of the Republic of South Africa
in section 163 envisages an important role for
organised local government and provides that an
Act of Parliament must cater for the recognition
of national and provincial organizations
representing municipalities, and determine
procedures by which local government may
consult the national and provincial government,
designate representatives to participate in the
National Council of Provinces (NCOP) and
nominate persons to the Financial and Fiscal
Commission (FFC).
Hence the organisations’ existence is as a result
of the Organised Local Government Act, 1997
(OLGA) that was enacted by Parliament. SALGA
is recognised as the sole voice of organised local
government in the Republic of South Africa.
There is no indication in the foreseeable future
that the recognition granted by the Minister per
the Government Gazette, regulation gazette no.
6087, volume 391 dated 30 January 1998, no.
18645 may be revoked, thus the NEC came to the
conclusion that SALGA will be in existence for
the next 12 months.
SALGA is constituted by its member
municipalities that cover the entire land surface
area of the Republic. In terms of the governance
model of the Republic which creates the three
spheres of government namely Local, Provincial
and National, there is no indication in the near
future of a change in the governance model.
Lastly, as indicated above the organisation
has submitted the outcome of its revenue
enhancement model to the Executive Authority
(Department of Co-operative Governance
and Traditional Affairs) as part of the MTEF
submission for the 2017/18 to 2019/20 planning
cycle, and made necessary representations
relating to the inadequacy of the SALGA funding
from the national fiscus. This submission was
preceded by a formal engagement between
the SALGA Chairperson and the Minister of
SALGA ANNUAL REPORT
2016/17