PRESENTATION TO THE SELECT COMMITTEE ON APPROPRIATIONS SCOA

PRESENTATION TO THE SELECT COMMITTEE ON APPROPRIATIONS (SCOA) ON DEVOLUTION OF PROPERTY RATE FUNDS GRANT MAY 2010 MEC ROBIN CARLISLE Department of Transport and Public Works 07 May 20010 1

PURPOSE To inform SCOA on: q Data trends q Capacity q Under-spending on Property Rates q Reporting Department of Transport and Public Works 07 May 20010 2

BACKGROUND i PGWC took responsibility for payment of Municipal Property Rates accounts as from 01 April 2008. i This function previously vested with the National Department of Public Works. i During 2008/09 a total of 1881 accounts payable to the value of R 184 690 167 were received from municipalities, but only R 147 092 538 (Budget of R 147 127 000) was paid resulting in a shortfall of R 37 563 167 Department of Transport and Public Works 07 May 20010 3

DATA TRENDS 08/09 09/10 R’ 000 Budget: Main 147 127 164 865 Adjustment: 2008/09 Shortfall 37 563 2009/10 Shortfall 66 403 147 127 268 831 147 092 250 285 37 598 6 500 (37 563) 12 046 Payable: Paid Accrued (Shortfall) / Surplus The Property Rates Grant is in its 3 rd 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. Department of Transport and Public Works 07 May 20010 4

CAPACITY OFFICIALS Manager LEVEL 12 FUNCTIONS PERFORMED • 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 1 x Permanent staff • Process monthly payments i. r. o property rates accounts on i. E-Works 3 x Contract (PSA) i 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. Department of Transport and Public Works 07 May 20010 5

UNDER-SPENDING Root cause Risks Mitigating Late submission of accounts from Co. CT 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 Co. CT 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. Department of Transport and Public Works 07 May 20010 6