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OBJECTIVE

Department of Public Works presentation on Devolution of Property Rates Conditional Fund Grant to Provinces NCOP Select Committee on Appropriations 12 September 2012 By Acting Director General Ms. M. Fatyela-Lindie. OBJECTIVE. Objective of the NCOP Select Committee on Appropriations

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OBJECTIVE

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  1. Department of Public Works presentation on Devolution of Property Rates Conditional Fund Grant to ProvincesNCOP Select Committee on Appropriations12 September 2012By Acting Director General Ms. M. Fatyela-Lindie

  2. OBJECTIVE Objective of the NCOP Select Committee on Appropriations • A report on the Devolution of Property Rates Grant 1st Quarter expenditure for the year 2012/13 financial year Purpose of the Presentation • To update and apprise the Select Committee on the 1st Quarter expenditure for the year 2012/13 financial year and provide additional information on the subject matter NCOP SCOA - 12 SEPTEMBER 2012

  3. Presentation Outline • Introduction & Background • Budget vs Expenditure • Devolution of Property Rates Fund Grant Allocation for 2012-13 • Expenditure Report: 1st April – July 2012 • Reasons for under expenditure for 2012/13 • Intergovernmental task team on Debt • Debt prior Devolution of Property Rates Fund Grant • Payment of property rates arrears from 2011 to date • Challenges Experienced by the Provinces & National Public Works • Proposed Way Forward NCOP SCOA - 12 SEPTEMBER 2012

  4. INTRODUCTION & BACKGROUND • Prior to 1994, DPW was deemed the custodian of most state-owned properties and therefore took the responsibility for payment of property rates. This practice continued notwithstanding the separation of ownership of state land between Provincial and National Departments as determined by the Constitution. • As from the 1st April 2008, the Function to pay property rates on behalf of the Provinces was transferred.

  5. INTRODUCTION & BACKGROUND (GIAMA) • Section 4 (1) (a) of Government Immovable Asset Management Act (GIAMA) stipulates that the National Government is the custodian of all national government immovable assets. Custodian appointments are assigned by the Ministers as per legislation, including the Minister of Public Works, Premiers and MECs to exercise the responsibilities associated with ownership on behalf of national government.These responsibilities include acquisition, management and operation, maintenance and disposals NCOP SCOA - 12 SEPTEMBER 2012

  6. INTRODUCTION & BACKGROUND (DORA) ……. • The National Department of Public Works (NDPW) as the Transferring Officer in accordance with Division Of Revenue Act (DORA) is expected to perform the following duties: • to provide, timeously, guidance and assistance to provincial reporting institutions to enable them to manage their Conditional Grant. • to monitor and evaluate the performance management information and the performance of provincial reporting authorities • to timeously address underperformance of provincial reporting (through M&E) • The Department of Public Works is further expected to perform a concurrent mandate as set out in paragraph 7.3 of the National Treasury Framework for Managing Performance Information. AGSA 2011 – findings: • In line with the requirements of the Act and Conditional Grant Framework, NDPW must constantly communicate with the Provinces to monitor the performance and expenditure (Oversight role of DPW ) NCOP SCOA - 12 SEPTEMBER 2012

  7. DEBT - INTERGOVERNMENTAL TASK TEAM Stipulation by National Treasury Publication Report on Debt • Section 71 of the Report as at December 2011 showed that Government debt amounts to R3.5 billion. Action taken on Debt • The Steering Committee comprising of Cooperative Governance and Traditional Leadership (CoGTA), Department of Performance Monitoring and Evaluation (DPME), National Treasury and National Public Works was established to deal with the debt. Findings on Debt by Task Team • Government debt reported includes property rates arrears prior to the Devolution of Property Rates Fund Grant. • The municipalities submitted invoices on property rates via National Treasury and the debt amounts R 443 million, which NDPW is in a process of verifying before payment can be made. NCOP SCOA - 12 SEPTEMBER 2012

  8. Debt before 1st April 2008 • Note: • DPW is in the process of verifying and making payments • Devolution Grant started on 1st April 2008 Kwa-Zulu Natal – Unverified Properties which came as a result of R293 Proclamation NCOP SCOA - 12 SEPTEMBER 2012

  9. % allocation per municipality in the Free state Province Free State – Maluti-A-Phofung charging high rates/tariffs NCOP SCOA - 12 SEPTEMBER 2012

  10. PAYMENT OF DEBT FOR 2011/12 (31 March 2012) NCOP SCOA - 12 SEPTEMBER 2012

  11. EXPENDITURE ON ARREARS (1ST APRIL 2012 TO DATE) Note>The total amount paid from 2011 to date on arrears is R81 677 457.14 NCOP SCOA - 12 SEPTEMBER 2012

  12. BUDGET VS EXPENDITURE FOR PREVIOUS FINANCIAL YEARS The increase in percentages reflects improvements in the invoices received from the various Municipalities NCOP SCOA - 12 SEPTEMBER 2012

  13. Budgeted Devolution of Property Rates Grant – 2012/13 NCOP SCOA - 12 SEPTEMBER 2012

  14. ACTUAL EXPENDITURE - APRIL –JULY 2012 ‘R0’ figures - Invoices not yet received NCOP SCOA - 12 SEPTEMBER 2012

  15. Challenges Experienced by the Provinces & National Public Works • Property information that some municipalities use for billing is not credible. Properties that are recorded on the municipal valuation roll and are not appearing on the Deeds search and Departmental Asset Register due to Vesting and Surveying not being finalized. • Late receipt of invoices from municipalities • Other municipalities do not submit their invoices/schedules at all (e.g Limpopo: Mogalakwena, North West: Ramotshere-Moila, Northern Cape: Dikgatlong and Joe Morolong NCOP SCOA - 12 SEPTEMBER 2012

  16. Challenges Experience by the Provinces & National Public Works • Some municipal valuation rolls are incomplete. • Lack of staff capacity in some small municipalities. • Some municipalities continue to bill rates and taxes and utilities jointly, thus resulting in reconciliation process being done (e.g. City of Cape Town). • Section 21 schools and R293 townships are encountering challenges on payment of their debt (e.g. Ethekwini Municipality) NCOP SCOA - 12 SEPTEMBER 2012

  17. Issues raised by municipalities during a workshop with SALGA and NDPW • Transformation of local government not synchronised with national and provincial – e.g. Change in administration • Fragmented municipal policies in treatment of national and provincial government properties – e.g. (Vested Properties that are not communicated to different spheres of government) NCOP SCOA - 12 SEPTEMBER 2012

  18. Operational Challenges experience by some municipalities • The ability for municipalities to split the bills varies across the country. • Municipalities unaware of transformation of national and provincial government post elections and changes not effected into billing systems. • Timing of billing and payments in relation to financial years of government. • Asset registers not updated within government prescripts and therefore not aligned to municipal property valuation rolls. • Lack of coordination and alignment of national government in municipal valuation rolls. • No effective system of communication between National/Provincial and Local Government. NCOP SCOA - 12 SEPTEMBER 2012

  19. Proposed Way forward • Continue to work with National Treasury, SALGA and municipalities on the project to clear the Government debt • Work with Department of Rural Development and Land Reform to facilitate the vesting of properties and surveying of vacant land. • Work with Human Settlements and municipalities to facilitate endorsement of housing board properties and R293 townships • Strengthening of Municipal forums for effective interactions with both National and Provincial Public Works to address intergovernmental debts, billing systems, interest rates among others. • Completion of Asset Register Enhancement Programmes for both National and Provincial Public Works NCOP SCOA - 12 SEPTEMBER 2012

  20. Thank You

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