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Presentation of the Devolution of Property Presentation of the Devolution of Property Rates Grant to the Standing Committee on Rates Grant to the Standing Committee on

AppropriationsAppropriations(SCOA)(SCOA)

12 October 201012 October 2010

Presented by:Cathy Motsisi

Chief Financial Officer

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BUDGET AND EXPENDITUREBUDGET AND EXPENDITURE

• Expenditure for Devolution of Property Rates fund to Provinces for the period ended 30 September 2010 is R 862 million, which is equivalent to 79% of the allocated budget.

• All provinces received their payments as per schedule and payments were made in full.

• The next payment, which will be the final (before the adjusted allocation) will be made in this current month for all provinces.

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BUDGET AND EXPENDITURE PER PROVINCEBUDGET AND EXPENDITURE PER PROVINCE

Province Budget

allocation

R’000

Amount Transferred to

Provinces

R’000

Balance Expenditure

%

Eastern Cape 147 467 100 000 47 467 67%

Free State 154 158 123 326 30 832 80%

Gauteng 191 381 150 000 41 381 78%

KwaZulu Natal 259 891 233 902 25 989 90%

Limpopo 15 154 11 366 3 788 75%

Mpumalanga 44 374 35 744 8 630 81%

Northern Cape 29 698 24 198 5 500 81%

North West 72 718 47 718 25 000 66%

Western Cape 181 351 136 012 45 339 75%

Total 1 096 192 862 266 233 926 79%

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ACTUAL EXPENDITURE TO MUNICIPALITIESACTUAL EXPENDITURE TO MUNICIPALITIESAS AT 31 AUGUST 2010AS AT 31 AUGUST 2010

Province Amount Transferred to

Provinces

R’000

Actual payments to

Municipalities

R’000

Balance Expenditure

%

Eastern Cape 100 000 13 555 86 445 14%

Free State 123 326 119 900 3 426 97%

Gauteng 150 000 1 475 148 525 1%

KwaZulu Natal 233 902 80 848 43 054 35%

Limpopo 11 366 7 577 3 789 67%

Mpumalanga 35 744 0 35 744 0%

Northern Cape 24 198 474 23 724 2%

North West 47 718 4 313 43 405 9%

Western Cape 136 012 198 724 -62 712 146%

Total 862 266 426 866 435 400 49%

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ADJUSTMENTS ESTIMATESADJUSTMENTS ESTIMATES

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APPROVED ADJUSTMENTS BUDGETAPPROVED ADJUSTMENTS BUDGET

• During the adjustment estimates, an amount of R866 million was requested as a shortfall for the property rates funds, unfortunately only R769 million was allocated.

• The request for additional funding was received from the following provinces:

KwaZulu Natal – R 450 mil Free State – R 186 mil Gauteng – R 106 mil Western Cape – R 83 mil Mpumalanga – R 26 mil Northern Cape – R 9, 9 mil North west – R 7, 3 mil

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NEW ADJUSTED BUDGETNEW ADJUSTED BUDGETProvince Original

allocation

R’000

Adjustment allocation

R’000

Revised allocation

R’000

% Increase

Eastern Cape 147 467 34 205 181 672 23%

Free State 154 158 68 228 222 386 44%

Gauteng 191 381 103 076 294 457 54%

KwaZulu Natal 259 891 450 000 709 891 173%

Limpopo 15 154 0 15 154 0%

Mpumalanga 44 374 13 241 57 615 30%

Northern Cape 29 698 9 902 39 600 33%

North West 72 718 7 272 79 990 10%

Western Cape 181 351 83 111 264 462 46%

Total 1 096 192 769 035 1 865 227 70%

Additional funding received will be transferred to Provinces in December as DPW has to submit revised drawing to National treasury for approval.

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Explanations to the Adjustments Estimates Explanations to the Adjustments Estimates allocationallocation

• With the exception of Free State and Mpumalanga, all provinces were allocated full amount requested.

Free State requested R 186 million and only R 68 million. The amount allocated was based on the projected over spending on the monthly reports submitted by the province to Treasury, which differs with the request submitted to the department.

Mpumalanga requested R 26 million and only R 13 million was allocated, and the allocation was based on the previous financial year additional funding allocation plus inflationary adjustment.

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CHALLENGESCHALLENGES

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CHALLENGES WITH MUNICIPALITIESCHALLENGES WITH MUNICIPALITIES

• Delay in issuing invoices on properties• Inaccurate billing systems• Inaccurate verification and reconciliation of invoices

from other municipalities which delay payments • The impact of the new Property Rates Act • Unreasonable Interest rates charges

We are working very close with SALGA to resolve We are working very close with SALGA to resolve the challengesthe challenges..

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I THANK YOU!I THANK YOU!