Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)Chapter 12 : Financial Reporting and Auditing121. Preparation and adoption of annual reports |
| (1) | Every municipality and every municipal entity must for each financial year prepare an annual report in accordance with this Chapter. The council of a municipality must within nine months after the end of a financial year deal with the annual report of the municipality and of any municipal entity under the municipality’s sole or shared control in accordance with section 129. |
| (2) | The purpose of an annual report is— |
| (a) | to provide a record of the activities of the municipality or municipal entity during the financial year to which the report relates; |
| (b) | to provide a report on performance against the budget of the municipality or municipal entity for that financial year; and |
| (c) | to promote accountability to the local community for the decisions made throughout the year by the municipality or municipal entity. |
| (3) | The annual report of a municipality must include— |
| (a) | the annual financial statements of the municipality, and in addition, if section 122(2) applies, consolidated annual financial statements, as submitted to the Auditor-General for audit in terms of section 126(1); |
| (b) | the Auditor-General’s audit report in terms of section 126(3) on those financial statements; |
| (c) | the annual performance report of the municipality prepared by the municipality in terms of section 46 of the Municipal Systems Act; |
| (d) | the Auditor-General’s audit report in terms of section 45(b) of the Municipal Systems Act; |
| (e) | an assessment by the municipality’s accounting officer of any arrears on municipal taxes and service charges; |
| (f) | an assessment by the municipality’s accounting officer of the municipality‘s performance against the measurable performance objectives referred to in section 17(3)(b) for revenue collection from each revenue source and for each vote in the municipality’s approved budget for the relevant financial year; |
| (g) | particulars of any corrective action taken or to be taken in response to issues raised in the audit reports referred to in paragraphs (b) and (d); |
| (h) | any explanations that may be necessary to clarify issues in connection with the financial statements; |
| (i) | any information as determined by the municipality; |
| (j) | any recommendations of the municipality’s audit committee; and |
| (k) | any other information as may be prescribed. |
| (4) | The annual report of a municipal entity must include— |
| (a) | the annual financial statements of the entity, as submitted to the Auditor-General for audit in terms of section 126(2); |
| (b) | the Auditor-General’s audit report in terms of section 126(3) on those financial statements; |
| (c) | an assessment by the entity’s accounting officer of any arrears on municipal taxes and service charges; |
| (d) | an assessment by the entity’s accounting officer of the entity’s performance against any measurable performance objectives set in terms the service delivery agreement or other agreement between the entity and its parent municipality; |
| (e) | particulars of any corrective action taken or to be taken in response to issues raised in the audit report referred to in paragraph (b); |
| (f) | any information as determined by the entity or its parent municipality; |
| (g) | any recommendations of the audit committee of the entity or of its parent municipality; and |
| (h) | any other information as may be prescribed. |