Mr LJ Mahlangu Chairperson: Municipal Demarcation Board Ms N Gwayi Deputy Chairperson: Municipal Demarcation Board Mr RH Monare CEO: Municipal Demarcation Board Ms MP Leburu Acting Chief Financial Officer 1 BUDGET REVIEW 2010/2011 AND STRATEGIC PLAN 2011/ /15 MUNICIPAL DEMARCATION BOARD

REPRESENTATION AND DOCUMENTS ● From the Board:  Mr L Mahlangu – Chairperson: Municipal Demarcation Board  Ms N Gwayi – Deputy Chairperson: Municipal Demarcation Board  Mr RH Monare – Chief Executive Officer  Ms MP Leburu – Acting Chief Financial Officer ● Documents tabled:  MDB Strategic Plan

OUTLINE Last briefing: 23 March 2010 Performance in 2010/11 Strategic Plan 2011/12 – 2014/2015 Financial Results 2010/11 Medium Term Expenditure Framework 3

LAST BRIEFING: 23 MARCH 2010 Briefed the Portfolio Committee on:  MDB Performance in 2009/10;  Strategic Plan 2010/11 – 2013/14;  Financial Results 2009/10;  Medium Term Expenditure Framework – 2010/11 to 2012/13; We advised the Portfolio Committee that:  The Third Municipal Demarcation Board, appointed by the President of the Republic on 19 February 2009, was doing a fundamental and strategic review of the MDB mandate, key processes, products and services; and its operational capabilities and practices ;  The Ward delimitation process started four months after the schedule date as result of late publication of the formula by the Ministry of Cooperative Governance and Traditional Affairs;  In 2011 following the May 18 local elections, We would have 8 metros (6 in 2006) 44 Districts Municipalities (46 in 2006) 226 local municipalities ( 231 in 2006)  Number of Wards would increase and would be 4240 (3754 in 2000; 3895 in 2006). Some municipaliies that did not qualify to have wards before, would now be entitled to have wards. 4

LAST BRIEFING: 23 MARCH 2010: MDB Performance in 2009/10 1. Creation of Spatial Areas within which Voters can elect Ward Councillors, and Municipalities can Deliver Services Reported at the last briefing that the Board had stopped receiving all new submissions/requests for municipal (outer) boundary changes, on 31 March Changes to municipal boundaries with respect to cases already in process had continued until August 2008, when all boundary changes were put on hold and we handed over boundaries to the IEC for them to start delimitation of VD’s. Thus very little work on municipal outer boundaries in 2009/10. The only significant re-determination in 2009/10 was the review of the earlier Board decision to categorise Msunduzi Municipality into a metro. Msunduzi would therefore remain a Category B municipality within the uMgungundlovu District. 5

LAST BRIEFING: 23 MARCH 2010: MDB Performance in 2009/10 2. Assessment of the Capacity of District and Local Municipalities in order to advise MEC’s for Local Government in their Decision to adjust powers & functions between District and Local Municipalities Reported that project did not proceed in 2009/10. Board resolved to devote resources and time to the ward delimitation process. In the meantime, the Board was in the process of commissioning work, to investigate and draft a report and recommendations on a comprehensive review of the current Municipal Capacity Assessment Model. 3. Board Supported by an Effective and Efficient Organisational Structure Reported on a process that was underway to procure the services of an Organisational Development (OD) Specialist at the Board, to investigate and to write a report with recommendations, on ways of improving the effectiveness of the Municipal Demarcation Board and its members, particularly staff members, by means of systematically planned interventions. 6

LAST BRIEFING: 23 MARCH 2010: MDB Performance in 2009/10 4. Ensuring Good Governance Reported on audits that had been performed by the Board’s Internal Auditors during the course of 2009/10, to ensure effectiveness and full compliance with Treasury Regulations:  Budget Review Audit;  IT Governance Audit. Said the Board was monitoring action by management to attend to issues of concern raised in the IT Governance Audit, before the end of the 2009/10 financial year, including a complete revamp of the Board’s Website. Expressed confidence that all issues would be dealt with effectively, and that our target of an unqualified audit opinion, would be attained. 7

LAST BRIEFING: 23 MARCH 2010: MDB Performance in 2009/10 5. Ensuring Sound Financial Management 8 ObjectiveKPITarget Actual Effective management of working capital Current ratio and quick ratio, at end of each quarter Current ratio: 2:1, Quick ratio: 1:1 Current ratio(14:1) Prepare short and long term budgets Budgetted expenditure to Budgetted income, at end of each quarter 95% or 105% 100% Control costs consistentlyActual expenditure to Grants received, at end of each quarter 95% or 105% 70%

LAST BRIEFING: 23 MARCH 2010: MDB Performance in 2009/10 6. Facilitate accountable local government, contribute to free and fair local elections and promote democracy Reported that most of the Board’s activities had at the time focussed mainly on the re- delimitation of wards in preparation for the 2011 local government elections. The Minister of Cooperative Governance and Traditional Affairs had gazetted the formula for the number of councillors on 15 July 2009, following the division of the national common voters’ roll into municipal segments, by the IEC on 12 February We also reported that in an attempt to improve on the past ward delimitation processes, especially in as far as stakeholder participation is concerned:  Time was set aside to allow municipalities opportunity to consult with stakeholders and to reach consensus on the preferred set of wards for  Provision was also made for failure to reach consensus in a municipality, in which case scheduled visits were to be made to those municipalities by teams from the MDB, to work together with local stakeholders towards a consensus position. The Board called for a very localised process, where municipalities would consult as widely as possible within their municipal areas before deciding on the preferred ward boundaries. 9

LAST BRIEFING: 23 MARCH 2010: MDB Performance in 2009/10 6. Facilitate accountable local government, contribute to free and fair local elections and promote democracy Provinces and SALGA were requested to assist in briefing municipalities and other local stakeholders such as Community Development Workers (CDWs) on the legislation, the timeframes, and the process, and to assist them in preparing their submissions to the Board. 10

MDB Performance in 2010/11 1. Creation of Spatial Areas within which Voters can elect Ward Councillors, and Municipalities can Deliver Services The ward delimitation process was completed for the 18 May 2011 local elections. This cluster was overall responsible for the planning of the process, but all staff and all Board members played and active role in finalising the process successfully. This process commenced on 15 July 2009 when the Minister published the formula for the number of councillors, based on the 2009 national common voters’ roll divided into municipal segments. 2. Assessment of the Capacity of District and Local Municipalities in order to advise MEC’s for Local Government in their Decision to adjust powers & functions between District and Local Municipalities Call for bids were made for service provider to develop New model and produce a number of reports in line with the new model. Bid evaluation process is proceeding in the new financial year to appoint service provider. 11

MDB Performance in 2010/11 3. Board supported by effective and efficient organisational processes, systems and practices Develop and nurture capability at all levels within the Board. Compliance with Employment Equity legislation. Improve employee relations at all levels within the Board. On course to develop a proper knowledge management system 4. Ensuring good governance We remain on course to receive yet another unqualified audit opinion by the Auditor- General. We have developed an IT Governance Framework, as part of improving efficiency and effectiveness of administrative processes and systems. 12

MDB Performance in 2010/11 5. Ensuring sound financial management We continue to maintain acceptable levels of performance with respect to sound financial management:  Internal control at the Board has continued to be reviewed and monitored.  Risk assessment and risk management has continued well, with the Audit and Risk Committee of the Board monitoring this area closely.  All statutory returns have been completed and submitted regularly.  Management of assets has been maintained at acceptable levels during the year. 6. Stakeholder relations At the end of the financial year we had procured the services of a media relations advisor. Also, we were in the process of developing a Stakeholder Relations and Communication Strategy. We have also participated in joint structures - CoGTA technical committee on TAS. 13

STRATEGIC PLAN 2011/12 – 2014/15 The Board has approved a strategic plan for the MTEF period commencing 1 April Following from last year’s Plan, with significant emphasis on making the Board and its work more visible and more understandable to major stakeholders, including the general public. Also emphasis on cultivating and maintaining vibrant and progressive relations with stakeholders. The third Board has in a critical manner questioned practices of the past at the Board. Has resolved to have things done differently, in a number of core areas of the Board’s work. Research has been done on key subjects:  Review of the Capacity Assessment Model;  Sizes of Municipalities  Criteria for Demarcation of Municipal Boundaries. 14

STRATEGIC PLAN 2011/12 – 2014/15 Vision, Mission and Values of the Organisation are as follows. 1. VISION  The Board’s vision is the full realization of Constitutional and local democracy in South Africa characterized by functional and viable municipalities, spatially configured so that its boundaries and wards covers the whole territory of the Republic, including productive and inclusive metropolitan municipalities, sufficiently and optimally capacitated district and local municipalities which are supported by sound local government system 2. MISSION  To perform its functions and to exercise its powers in such a manner so as to empower municipalities to fulfil their constitutional obligations, primarily the provision of democratic and accountable local government, and effective, efficient and sustainable service delivery within sound boundaries. 3. VALUES  Accountability  Dedication  Effectiveness  Impartiality  Integrity  Professionalism 15

STRATEGIC PLAN 2011/12 – 2014/15 The Municipal Demarcation Board has for this Strategic Plan identified strategic themes to focus and guide the organisation over the next few financial years (2011/2012, 2012/2013, 2013/14 and 2014/1 16 Theme 1Determination and re-determination of municipal boundaries and categorisation and re-categorisation of municipalities Theme 2 Assessment of the capacity of metropolitan, district and local municipalities Theme 3 Board supported by effective and efficient organisational processes, systems and practices Theme 4 Ensuring good governance Theme 5 Ensuring sound financial management Theme 6 Stakeholder relations

STRATEGIC THEME/PRIORITY 1: DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES AND CATEGORISATION AND RE-CATEGORISATION OF MUNICIPALITIES Following the May 18 local government elections, the process of reconfiguration and alignment of boundaries is set to continue; In order to lay a firm foundation for having things to be done differently and to improve the manner in which the boundary re-determinations process unfolds, the Board has received reports on research it had commissioned on core areas of the Board’s work:  Unpacking, clarifying and expanding on Criteria for Demarcation of Municipal Boundaries;  Seeking to understand issues around Sizes of Municipalities. Consequently the Board has resolved to:  Adopt the position on sizes of municipalities, as espoused in the research work submitted;  Develop and clarify the work on demarcation criteria, to enhance buy-in from the stakeholders.  Hold public hearings and/or investigations for every boundary re-determination request case. 17

STRATEGIC THEME/PRIORITY 1: DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES AND CATEGORISATION AND RE-CATEGORISATION OF MUNICIPALITIES Within current legal framework the next local elections will be held in 2016, which means that all changes to municipal boundaries need to be finalised at the beginning of This will allow the MDB to delimit wards in 2014/15, and the IEC to prepare for the elections in The intention is to finalise all changes to municipal boundaries by around May 2013, where after wards will be delimited for the 2016 local elections. It is envisaged that the process will, in broad terms, unfold as follows: 18 June – Oct 2011 Inputs by stakeholders on current outstanding boundary changes. Stakeholders submit new requests for boundary changes to the MDB. Visits to municipalities where necessary. Nov - Dec 2011  Mapping of new proposals Jan – March 2012 Follow up communication and visits to municipalities, where necessary, to refine maps, and descriptions. 30 May 2012 Closing date for the submission of written views and representations on Section 26 notices to the MDB.

STRATEGIC THEME/PRIORITY 1: DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES AND CATEGORISATION AND RE-CATEGORISATION OF MUNICIPALITIES June/July 2012 MDB considers public views and representation. Re-map boundaries where necessary. Prepare Section 21 notices. Prepare for formal investigations, or public hearings, where necessary. Aug 2012 Publish sec 21 notices approved by the MDB for objections. Publish notices for public meetings in terms of section 28, if necessary. Sept 2012 Close period for objections on section 21 notices approved by the MDB. Publish notices for public meetings in terms of section 28, if necessary. Sept – Oct 2012 Public meetings and investigation as per the published programme. Nov/Dec 2012 MDB considers outcomes of investigations/public meetings, to decide on re- determination of boundaries, and to approve Section 21 notices. Publish (second round) section 21 notices. Jan 2013 End of period for public objections for (second round) Section 21 notices. Jan - March 2013 Analyse and map objections. Prepare reports and draft Section 21(5) notices. 19

STRATEGIC THEME/PRIORITY 1: DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES AND CATEGORISATION AND RE-CATEGORISATION OF MUNICIPALITIES April 2013 Board considers all objections and decides to confirm, vary or withdraw its re-determinations. May 2013 Publish board decisions in terms of Section 21(5). Provide Section 21 and section 21(5) notices to the IEC and the MECs, and other stakeholders. Close changes to municipal boundaries. May 2013 All changes to municipal boundaries finalised and closed by the MDB. June – Oct 2013 IEC and MECs gazette Section 23 notices. Nov/Dec 2013 Strategic planning and strategic guidance from Board on the ward delimitation process. Jan/Feb 2014 Formula and number of councillors gazetted. Feb 2014 New Board appointed. March 2014 MDB commence with ward delimitation. New Board to decide on the process. 20

STRATEGIC THEME/PRIORITY 1: DETERMINATION AND RE-DETERMINATION OF MUNICIPAL BOUNDARIES AND CATEGORISATION AND RE-CATEGORISATION OF MUNICIPALITIES June 2015 Hand over of final ward boundaries to the IEC. July - April 2015 IEC prepares for the 2016 local elections. May 2016 Local elections. 21 EXPENSE2011/ /2013 Boundary determination4,804,7955,078,668 GIS1,348,2461,459,697 Research & Compliance Total6,566,8816,967,250

STRATEGIC THEME/PRIORITY 2: ASSESSMENT OF THE CAPACITY OF METROPOLITAN, DISTRICT AND LOCAL MUNICIPALITIES For the period of this strategic plan and going forward, the Board will shift to a new and revised model of municipal capacity assessments, following a comprehensive review of the model that the Board has used from 2001/02 to 2008/09. The review identifies a number of shortcomings with the model that the Board has used, and concludes that, while the Capacity Assessment helps the MDB to fulfill a purpose closely linked to our system of local government:  The two-tier system of local government on which the current capacity assessment model is based, is neither effective nor efficient;  While designed to possibly mitigate the risks of a two-tier system, adjustments by MECs of scheduled functions have arguably exacerbated the problem;  The definition of municipal capacity, which informs the framework for adjustments, is considered to be inadequate and too narrow in shaping the conceptualization of municipal capacity;  Understanding the environmental capacity of municipalities is fundamental to the demarcation process, with institutional capacity playing a secondary role. The Capacity Assessments addresses only this secondary consideration and are therefore not useful for the process of adjusting municipal boundaries. 22

STRATEGIC THEME/PRIORITY 2: ASSESSMENT OF THE CAPACITY OF METROPOLITAN, DISTRICT AND LOCAL MUNICIPALITIES  The foundation of the model that has been used to date, relies on a limited and narrow set of capacity related indicators, which are informed by a self-assessment by municipalities. There is therefore significant scope to improve the depth and breadth of the conceptual understanding and measurement of capacity, as well as the enhancing objectivity of the process of assessing capacity.  While the Capacity Assessment data and reports have come to fill an important space in terms of building an understanding of local government capacity in South Africa, the review of the data and outputs suggest that Capacity Assessments have much more potential in terms of analysis and there is thus scope for the Capacity Assessments to make an even greater contribution as a resource for municipal level analysis. The Municipal Demarcation Board will pursue a new approach to capacity assessments that seeks to:  Address the limitation that capacity is insufficient information on which to make recommendations on re-assigning a function;  Position the Capacity Assessment as Strategic Resource;  Revise the Capacity Assessment Model; 23

STRATEGIC THEME/PRIORITY 2: ASSESSMENT OF THE CAPACITY OF METROPOLITAN, DISTRICT AND LOCAL MUNICIPALITIES  Conduct a Qualitative Review/Investigation of Powers and Functions  Revise the data collection methodology;  Revise the Output. Budget Allocation 24 EXPENSE2011/ /2013 Capacity Assessment5,180,0005,569,000 Total5,180,0005,569,000

STRATEGIC THEME/PRIORITY 3: BOARD SUPPORTED BY EFFECTIVE AND EFFICIENT ORGANISATIONAL PROCESSES, SYSTEMS AND PRACTICES Building and enhancing the capacity of the Board’s internal machinery is a major priority for the Board. In last financial year, the Board appointed an Organisational Design (OD) specialist to carry out an investigation into the Board’s organisational structure, as well as significant restructuring of the organisation’s establishment. The service provider’s brief was to investigate and to write a report with recommendations, on ways of improving the effectiveness of the Municipal Demarcation Board and its members, particularly staff members, by means of systematically planned interventions. The service provider has since delivered on the brief, and the Board has resolved to bring about far-reaching changes in levels of some positions in the Board’s organisational structure. Also to significantly restructure of the organisation’s establishment – this in order to have things done differently, in a number of core areas of the Board’s work. The following activities and objectives are to be pursued in the MTEF period and the period of this Plan:  The Board will outline to staff and other relevant stakeholders a plan of action to implement changes to the organisational structure at the MDB;  The Board will lead the full process to effect the changes, including identification and securing of the necessary financial and other resources to realise the changes. 25

STRATEGIC THEME/PRIORITY 3: BOARD SUPPORTED BY EFFECTIVE AND EFFICIENT ORGANISATIONAL PROCESSES, SYSTEMS AND PRACTICES Budget Allocation Human Resources Administration 26 EXPENSE2011/ /2013 Staff Salaries13,013,68514,167,091 Staff Training195,205212,506 Total13,208,89014,379,597 Training at 1.5% of salary bill Rent2,310,848 Administration expenses3,655,7453,846,246 Total5,966,5936,157,,093

STRATEGIC THEME/PRIORITY 4: ENSURING GOOD GOVERNANCE Continue to endeavour to ensure that good governance arrangements are in place throughout the organization, to support the Board processes effectively and comply with legislation. Good governance arrangements at the Board must be under constant examination and review, to ensure that an appropriate set of checks and balances on the stewards of the organization, is maintained at all times. The following activities and objectives are to be pursued in the MTEF period and the period of this Plan: Maintain and, where applicable, improve compliance with legal frameworks As a constitutional institution, in terms of the PFMA, funded from appropriations by Parliament, the Board is compelled to comply with various legal frameworks; Policies and procedures have been developed in most areas of the Board’s work to guide our compliance. However, actions must continue to solidify IT Governance and Contract Management, as well as risk assessment and risk management. 27

STRATEGIC THEME/PRIORITY 4: ENSURING GOOD GOVERNANCE Continued actions to improve the efficiency and effectiveness of administrative processes and systems While a substantial amount of work has over the years been done to implement policies, procedures and best practice at the Board, there remains a significant scope to improve in enhancing capacity in relevant areas, in order to improve the lead times of key processes. These include: establishment and appropriate staffing of the Board Secretariat to provide the necessary support to the Board; appropriate staffing of the Risk management component in the Finance Cluster; appropriate staffing of the IT section, to improve IT Governance; establishment of a stakeholder management unit at the Board and appropriate staffing of the Unit. Continued Actions to Improve the quality and usage of management information This is key to ensure sound management, decision-making and good governance. A central initiative in achieving this objective is to maintain and improve on the Board’s in-house information management system to provide relevant and regular updated information, and internal communications. 28

STRATEGIC THEME/PRIORITY 4: ENSURING GOOD GOVERNANCE Budget Allocation 29 EXPENSE2011/ /2013 Board2,181,3852,237,495 Management2,061,0351,108,198 4,242,4203,345,693

STRATEGIC THEME/PRIORITY 5: ENSURING SOUND FINANCIAL MANAGEMENT Doing more with less is one of the major challenges facing the public sector today. Budgetary pressures are compounded by increasing costs, rising expectations and legislative mandates. Eventually, organisations have to decide how to provide the right services with the appropriate resources, while attaining strategic objectives and managing performance. The Board is no different from any other public sector entity in that it is also facing the challenge of limited resources in the coming medium term expenditure period. This theme addresses effective financial management of allocated resources to ensure that it achieves its legislative mandate. Sound financial management is informed by five principles, as follows:  Manage resources to accomplish strategic goals – To ensure that program priorities are achieved within provided funding levels, systems must be in place, that provide management with timely insight into trends and financial results. Therefore, management monitors budget execution, including monitoring projects, tasks, program accomplishments, and the overall financial health of its operations to ensure that plans and priorities are achieved. 30

STRATEGIC THEME/PRIORITY 5: ENSURING SOUND FINANCIAL MANAGEMENT Effectiveness of financial planning – Financial planning encompasses budget preparation for the medium term informed by the work programs of the various clusters at the Board. Budgets are formulated with programmatic insight, resulting in justifiable requests for resources to satisfy mission needs. Ensure adherence to laws, regulations and contractual obligations – The Board has the responsibility to ensure that all applicable laws and regulations are carried out to make certain that there is responsible use of taxpayer money and the protection of the Board’s assets against fraud, waste, abuse and mismanagement. The primary laws which the Board should adhere in respect to financial management are the Public Finances Management Act, the Preferential Procurement Policy Framework Act and the Treasury Regulations issued in terms of PFMA. The target is to achieve an unqualified audit opinion as expressed by the Auditor General on an annual basis. Ensure effective and efficient use of resources – Management takes responsibility to ensure that scarce resources are being utilized economically and efficiently. Oversight efforts and analyses focus on the high impact areas. In this regard, regular cost control measures have been put in place to monitor adherence to budget allocations for each program. Accurate and relevant financial reporting - Financial reporting entails external reporting as required in terms the PFMA and internal reporting for various governance structures, i.e. Audit Committee, Exco and the Board. Financial information is essential to planning, real time decision making and assessing program performance. This information is presented in a useful format that addresses the needs of those structures. 31

STRATEGIC THEME/PRIORITY 5: ENSURING SOUND FINANCIAL MANAGEMENT Budget Allocation 32 EXPENSE2011/ /2013 Audit expenses2,056,0002,210,331 Finance918,216906,036 2,974,2163,116,368

STRATEGIC THEME/PRIORITY 6: STAKEHOLDER RELATIONS As a constitutional institution, it is important for the Board to reinforce the need to engage with all stakeholders in a structured manner, to realise specific organisational goals as well as to meet broader social, environmental and economic challenges. T he need for engaging stakeholders in a structured manner, also reinforced by the fact that stakeholder relations is one of the core functions of all Board, in terms of the corporate governance principles as outlined in the King III report, to which the Municipal Demarcation Board subscribes. This theme addresses the need to have a stakeholder management function at the Board which must, over the short to medium term, do the following:  Prepare a Stakeholder Management and Governance Framework;  Develop a Stakeholder Engagement Plan for 2011/12 – 2014/15;  Develop a Stakeholder Communication Strategy for 2011/12 – 2014/15;  Prepare and enter into Service Level Agreements between the Board and all of its stakeholders;  Set up a Stakeholder Management Unit, including a proposed budget for the entire service 33

PROPOSED DEVELOPMENTS GOING FORWARD  Ward Delimitation  Current system and processes is time consuming and costly;  Study to seek a simpler and more cost effective system that will also enhance stability and service delivery at local level.  One of the things we would like to propose is that the timelines be set within which the Minister must publish the formula for the number of councillors. 34

FINANCIAL RESULTS 2010/11 Receipts for the year Financial performance Breakdown of expenditure 35

RECEIPT FOR THE YEAR ENDING 31 MARCH

SUMMARY OF FINANCIAL RESULTS Total income for the period R37.9 million Expenditure during the period R36.0 million Resulting in a surplus of R1,9 million Expenditure Variance of R1,6 million Projections – Board has spend within budget 37

EXPENDITURE FOR THE YEAR ENDING 31 MARCH

BREAKDOWN OF EXPENDITURE FOR THE YEAR ENDING 31 MARCH 2011 Expenditure Item Amount Percentage of Total Income Administrative expenses 13,84036% Employee benefits 11,32230% Audit fees 9232% Project expenses 3,5809% Other operating expenses 5,49914% Depreciation and amortisation 8022% TOTAL EXPENDITURE 390 Surplus for the period 36,00595% 1,9285% 39

BREAKDOWN OF EXPENDITURE FOR THE YEAR ENDING 31 MARCH 2011 Administrative Expenses13,840 - Insurance203 - Members Allowances1,692 - Internal Audit Fees634 - Conferences and Seminars - Venue and Facilities1,229 - Training and staff development97 - General and Administrative expenses2,362 - Advertisements96 - Publications etc.5,984 - Telephone243 -Minor Assets10 -Legal fees719 -Stationery and printing551  Bank Charges 20 40

BREAKDOWN OF EXPENDITURE FOR THE YEAR ENDING 31 MARCH 2011 Employee Benefits11,322 - Staff Salaries and wages10,862 - Employers contributions to UIF and other salary related costs460 Project Expenses3,580 - Consulting fees2,788 - Capacity assessment792 Other Operating Expenses5,499 - Licence renewals Travel and subsistence 2,161 - Consumables and stores Courier and delivery charges 42 - Maintenance, repairs and running costs - Machinery and equipment27 - Rentals in respect of operating leases - Building2,285 - Plant, machinery and equipment163 41

MEDIUM TERM EXPENDITURE FRAMEWORK 2011 MTEF amounts to R121.4 million Allocation for 2011/12 increased by R1.3 million Representing a 3 % increase In 2012/13 and 2013/14 grants increased by 5% in respective years. 42 Grants2011/122012/132013/14 Amount38,48240,36242,578

CAPACITY OF THE BOARD: BUDGET FOR THE MTEF PERIOD 2011 TO / / / /2014 * Income37,612, Grants37,187, Sundry income Interest income425, Expenses37,612, Capacity Assessment4,933, Publications6,787, Boundary determination Rental expense2,310, Salaries11,195, Depreciation710, Members allowances1,766, Audit expenses1,896, Staff Training167, Other expenses7,843, Net surplus000 0 Period beyond 2011 MTEF

CAPACITY OF THE BOARD: BUDGET FOR THE MTEF PERIOD 2010 TO 2014 Other expenses2010/ / / /2014 * Advertising Bank charges Legal fees Printing and publication Venues and facilities Travel and subsistence Entertainment Office expenses Consulting fees other Computer expenses Other: insurance Other: fleet expenses Repairs and maintenance Utilities Stakeholder management Other: Admin and operations

Questions and Comments 45