1

Department of Transport and Public Works

07 May 20010

PRESENTATION TO THE SELECT COMMITTEE ON APPROPRIATIONS (SCOA) ON DEVOLUTION OF PROPERTY RATE FUNDS GRANT

MAY 2010

MEC ROBIN CARLISLE

2

Department of Transport and Public Works

07 May 20010

Data trends

Capacity

Under-spending on Property Rates

PURPOSE

To inform SCOA on:

Reporting

3

Department of Transport and Public Works

07 May 20010

BACKGROUND

PGWC took responsibility for payment of Municipal Property Rates accounts as from 01 April 2008.

This function previously vested with the National Department of Public Works.

During 2008/09 a total of 1881 accounts payable to the value of R184 690 167 were received from municipalities, but only R147 092 538 (Budget of R147 127 000) was paid resulting in a shortfall of R37 563 167

4

Department of Transport and Public Works

07 May 20010

08/09 09/10

R’000 R’000

Budget:

Main 147 127 164 865

Adjustment: 2008/09 Shortfall

2009/10 Shortfall

37 563

66 403

147 127 268 831

Payable:

Paid 147 092 250 285

Accrued 37 598 6 500

(Shortfall) / Surplus (37 563) 12 046

DATA TRENDS

The Property Rates Grant is in its 3rd year of Implementation and the data trends will be developed over time.

PGWC is currently in the process of acquiring additional sites for health and educational purposes which will result in additional property rates expenditure.

5

Department of Transport and Public Works

07 May 20010

No funding was transferred to create the additional administrative capacity to manage the devolved property rates payments. Currently the function is performed by 2 permanent staff members and 4 contract personnel.

OFFICIALS LEVEL FUNCTIONS PERFORMED

Manager 12 • Budget and Personnel Matters

•Financial and other reports

•High level enquiries (MEC, AG, PT, etc)

• Strategic Interventions with municipalities and other stakeholders.

1 x Verifier Contract (PSA) • Check and verify correctness of payments.

• Verify and certify payments on system

• Collate and verify production and other statistical detail

4 x Administrative Officials

1x Permanent staff

3 x Contract (PSA)

• Process monthly payments i.r.o property rates accounts on iE-Works

CAPACITY

6

Department of Transport and Public Works

07 May 20010

UNDER-SPENDING

Root cause Risks Mitigating

Late submission of accounts from CoCT due to process of splitting rates and utility accounts

Late payments of accounts, accrual of interest and potential under spending

Additional hours work to avert potential late payments and under spending. Monthly meetings with CoCT on outstanding accounts.

2009/10 accounts received after financial closure.

Potential under spending, and under provision for 2010/11 allocation.

Regular follow-up procedures with municipalities on outstanding accounts. Liaise timeously with PT and NDPW on potential allocation shortfall

Delays in finalisation of transfer of new sites for Education and Health purposes.

Potential under spending, and under provision for 2010/11 allocation.

Timely follow-up with various role-players to ascertain status of transfer.