NORTHERN CAPE PROVINCE DEPARTMENT OF ROADS AND PUBLIC WORKS DEVOLUTION OF RATES AND TAXES FINANCIAL YEAR 09/10

CONTENT Projections Introduction Budget allocation Spending 2009/10 Monitoring Reporting Challenges

INTRODUCTION The devolution of property rates fund grant was in introduced 2008/2009 to ensure that provinces take over the responsibility of paying property rates on properties previously administered by National Government. To enable provincial accounting officers to be fully accountable for their expenditure and payment of provincial property rates

Budget Allocation Funds were allocated per province based on the determination/calculations submitted by the national Department of Public Works. The determinations/calculations plans assessed against: Property lists extracted from the national department's assets register of properties which were paid during 2005/06 financial year. Calculations based on the 2005/06 financial year's expenditure 2008/09 R’000 2009/10 2010/11 2011/12 DORA Allocation 24 094 26 998 29 698 31 480

Spending 2009/10 Amount R’000 Total amount Allocated as per DORA 26 998 Add: Adjustment budget allocation 10 300 Total available for 2009/10 37 298 Less: Shortfall paid of 2008/09 financial year 4 768 Sub-Total for 2009/10 32 532 Less amount paid during the 2009/10 financial year 32 310 Total amount payable for 2009/10 to municipalities 220 Arrears/interest payable 667 Total amount outstanding at 31 March 2010 887

Spending 2009/10 The department has spent 99% of its allocation in the 2009/10 financial year. The additional R10 million received during the adjustment budget assisted the province pay all municipalities except Except the of R222 000-00 is payable to Thembelihle Municipality.

Projections

Monitoring No funding was received to accommodate the posts to perform this function. Department had to budget for: Assistant Director Senior Administration Officer Administration Officer

Reporting Structures Monthly spending reports are submitted to National Public Works. Only capacitated Municipalities submit monthly statements reflecting payments received.

Challenges There are properties where the land still belongs to the municipality while the buildings belong to government.Once these properties is vested the arrear and the recurrent cost for rates and taxes need to be paid. The client departments must budget for rates and taxes for all new infrastructure developments. Properties that was transferred from the previous NW province that must also be vested. Due to this under allocation municipalities is charging interest on arrear accounts

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