In relation to its financial performance overview, the CFO Mr O Shelembe reported that the total revenue of the LGSETA for the period under review was R447 million, total expenses R319 million and the net surplus was R 127 million. The LGSETA spent 10.5 percent of its budget on administration, 20 percent on mandatory grants and 49.5 percent on discretionary grants. The under-performance in these grants was mainly due to delays in completion of supply chain management processes. The LGSETA received a qualified audit opinion with matters of emphasis mainly due to; poor leadership, non- compliance with supply chain management processes, internal control deficiencies and restatement of figures in the annual financial statements.