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Presented by Cathy Motsisi

Chief Financial Officer

Presentation for conditional grant (Division of Revenue Act) to Select Committee on

appropriations.

23 March 2011

Devolution of property rates fund to provinces

grant – 2010/11

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Devolution of Property Rates Grant – February

2011 Province Budget

Allocated

Amount Transferred to Provinces

R’000

Actual payments

to Municipali

tiesR’000

Balance % Spent

Budget2011/12

Eastern Cape

181 672 181 672 165 699 15 973 91% 192 709

Free State 222 386 222 386 204 061 18 325 92% 219 916

Gauteng 294 457 294 457 200 031 94 426 68% 270 775

KwaZulu Natal

709 891 709 891 318 703 391 188 45% 518 585

Limpopo 15 154 15 154 14,699 455 97% 34 054

Mpumalanga

57 615 57 615 57 167 448 99% 73 964

Northern Cape

39 600 39 600 29 858 9 742 75% 41 754

North West

79 990 79 990 56 675 23 315 71% 160 192

Western Cape

264 462 264 462 263 111 1 351 99% 291 281

Total 1 865 227

1 865 227 1 310,004 555,223 70% 1 803 230

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Budget & Expenditure Growth over a Six Year Period

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14

Budget

Expenditure

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Devolution of property rates fund to provinces grant –

2010/11• The department has transferred all funds allocated for devolution of

property rates fund to provinces grant as per schedule.

• The budget allocation for 2011/12 which shows a 3,3% increase from the current allocation is inadequate as demonstrated by the increased spending as at the end of February.

• Provinces like Free State and Limpopo have already indicated shortfall of approximately R50 million for the current payments.

• The shortfall are inevitable because as the Municipalities improve their administration and discover properties that were previously not billed, they implement retrospective billing, and in some instances they also charge interest.

• This exercise although helpful in ensuring that the Municipalities increase their revenue, it does not take into consideration the availability of funds by National and Provincial Public Works.

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Budget Growth over a Six Year Period

Province 2008/09R’000

2009/10R’000

2010/11R’000

2011/12 R’000

2012/13R’000

2013/14R’000

Eastern Cape

119,638 210 334 181 672 192 709 202 854 214 360

Free State 125 066 185 104 222 386 219 916 233 737 249 390

Gauteng 155 265 401 099 294 457 270 775 284 314 299 951

KwaZulu Natal

210 846 237 382 709 891 518 585 556 669 599 319

Limpopo 12 294 19 217 15 154 34 054 35 757 37 724

Mpumalanga

36 000 60 337 57 615 73 964 77 647 84 601

Northern Cape

24 094 37 298 39 600 41 754 44 355 47 303

North West 58 995 66 776 79 990 160 192 179 984 206 241

Western Cape

147 127 268 864 264 462 291 281 322 730 351 963

Total 889 325 1 486 411 1 865 227

1 803 230

1 938 047 2 090 852

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Expenditure Growth Over a Three Year Period

Province31 Mar 09% Spent

31 Mar 10% Spent

28 Feb 11% Spent

Eastern Cape 50% 52% 91%

Free State 56% 100% 92%

Gauteng 54% 56.9% 68%

KwaZulu Natal 99.5% 99.9% 45%

Limpopo 56% 37.70% 97%

Mpumalanga 100% 85.8% 99%

Northern Cape 99.8% 100% 75%

North West 98% 100% 71%

Western Cape 100% 93.1% 99%

Total 78% 79.2% 70%

EPWP Incentives to provinces and

municipalities – 2010/11

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EPWP Incentives to Provinces and Municipalities – 2010/11

• Provincial Departments in 7 out of the 9 Provinces have been able to access the EPWP infrastructure sector incentive. R185.9 million will be paid out of the R330 million available for the 10/11 financial year considering 3rd quarter reporting. This represents 56% of the Provincial allocation. Only the Northern Cape and North West Provinces have not accessed their incentive allocation for the 10/11 financial year.

• For Municipalities, R 273.306 million of the R 622.996 million will be paid considering 3rd quarter reporting. This represents 44% of the Municipal allocation for the 10/11 financial year.

• Considering the overall infrastructure incentive allocation, R 459 Million of the R 954 Million or 48% has been accessed.

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EPWP Incentives to Provinces– 2010/11

Province Infrastructure Incentive allocation for the 10/11 National financial year (R’000)

3rd Quarter incentive payment for the 10-11 financial year(R’000)

Total incentive disbursedIn the 10/11 financial year (R’000)

Percentage of the 10/11 incentive disbursed(%)

Eastern Cape 60,354 4,591 28,636 47

Free State 13,767 115 2,380 17

Gauteng 39,154 0 2,498 6

Kwa-Zulu Natal 169,470 36,352 135,613 80

Limpopo 2,903 1,348 6,790 234

Mpumalanga 18,074 5,432 8,293 46

Northern Cape 1,167 0 0 0

North West 2,897 0 0 0

Western Cape 23,218 0 1,700 7

Total 330,004 47,838 185,910 56

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EPWP Incentives to Municipalities– 2010/11

Province Infrastructure Incentive allocation for the 10/11 National financial year (R’000)

3rd Quarter incentive payment for the 10-11 financial year(R’000)

Total incentive disbursedIn the 10/11 financial year (R’000)

% Disbursed

Eastern Cape 97,806 8,664 37,531 38

Free State 34,400 3,223 6,071 19

Gauteng 168,098 11,575 133,394 79

Kwa-Zulu Natal 123,613 2,134 46,113 37

Limpopo 55,355 3,271 23,060 42

Mpumalanga 37,288 1,464 3,488 9

Northern Cape 50,399 1,340 3,965 8

North West 32,999 744 17,135 52

Western Cape 26,038 723 2,549 10

Total 622,996 33,136 273,306 44

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Measures put in place to improve performance EPWP Incentives to provinces

and municipalities – 2010/11

• Public bodies ( Provincial Departments and Municipalities) are being provided with support to report on EPWP. The 90 data capturers employed are helping in this regard.

• A partnership with DBSA through the Siyenza Manje programme has been put in place to support municipalities jointly.

• Training of officials in Municipalities in Labour-intensive methods of construction with LG-SETA is currently being rolled out.

• Training on reporting is also being done to Public body officials to enable them to report better on EPWP.

• Technical support being provided to Public bodies to implement their projects more labour-intensively so as to create more work opportunities and Full Time Equivalents that will increase the incentive drawn down.

Expanded Public Works Programme Incentive grant to provinces for social sector – 2010/11

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EPWP incentives grant to provinces for social sector – January 2011

• Budget allocation for EPWP incentives grant to provinces for social sector for 2010/11 financial year is R 56.6 million and the total allocation has been fully transferred to provinces in line with payment schedule. The transfer payment was scheduled as a once off payment and was transferred was made on the 31 August 2010.

• Treasury expenditure report for EPWP incentives grant to provinces for social sector shows that provinces have paid R 26.2 million to provinces with Eastern Cape, Free State and Western Cape not having spent the allocation.

• The report below show the budget and expenditure per province:

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EPWP incentives grant to Provinces for Social

Sector – January 2011

Province Budget Allocated

Amount Transferred to Provinces

R’000

Actual payments to social sector

R’000

Balance Expenditure

%

Eastern Cape

10 884 10 884 - 10 884 0%

Free State 4 992 4 992 - 4 992 0%

Gauteng 5 100 5 100 1 853 3 247 36%

KwaZulu Natal

5 376 5 376 8 194 - 152%

Limpopo 10 137 10 137 7 023 3 114 69%

Mpumalanga 9 240 9 240 1 637 7 603 18%

Northern Cape

2 616 2 616 662 1 954 25%

North West 7 104 7 104 6 887 217 97%

Western Cape

1 188 1 188 - 1 188 0%

Total 56 637 56 637 26 256 31 381 47%

Conditional grant allocations – 2011/12 to

2013/14

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EPWP incentives grant to Provinces – 2011/12 to 2013/14

Province 2011/12

R’000

2012/13R’000

2013/14R’000

Eastern Cape 30 431

Free State 10 606

Gauteng 44 210

KwaZulu Natal 129 836

Limpopo 9 545

Mpumalanga 9 486

Northern Cape 4 809

North West 5 758

Western Cape 22 587

Total 267 269 325 220 401 588

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EPWP incentive grant to provinces for Social Sector – 2011/12 to

2013/14Province 2011/12

R’000

2012/13R’000

2013/14R’000

Eastern Cape 5 070

Free State 15 586

Gauteng 34 848

KwaZulu Natal 30 269

Limpopo 28 332

Mpumalanga 13 407

Northern Cape 13 890

North West 42 222

Western Cape 16 734

Total 200 358 241 504 286 028

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Conditional grant allocations – 2011/12 to

2013/14

• The budget for EPWP incentives for 2012/13 and 2013/14 will only be allocated per provinces towards the end of the financial year as the allocation is performance based.