Division of Revenue Act, 2013 (Act No. 2 of 2013) > Chapter 3 : Conditional Allocations to Provinces and Municipalities > Part 3 : Matters relating to Schedule 4 to 7 allocations > 16. Expenditure in terms of purpose and subject to conditions

1)	Despite anything to the contrary in any other legislation, an allocation referred to in Schedules 4 to 7 may only be utilised for the purpose stipulated in the Schedule concerned and in accordance with the applicable framework.

A receiving officer may not transfer any Schedule 5 allocation thereof to any other entity or other sphere of government for the performance of a function envisaged in terms of the allocation, unless the receiving officer and that entity or other sphere of government, with the approval of the National Treasury, agreed to a payment schedule and-

a)	it is a transfer that is approved in the budget of the receiving provincial department or municipality or the applicable framework;

b)	it is a payment for services rendered or goods received, which services or goods were procured in accordance with the supply chain management policy or procurement policy of the relevant province or municipality and for which adequate documentation for payment has been received; or

c)	in the case of an advance payment or a transfer which is not consistent with the budget of the receiving provincial department or municipality-

i)	the receiving officer has certified to the National Treasury that the transfer is not an attempt to artificially inflate its expenditure estimates and that there are good reasons for the advance payment or transfer; and

ii)	the National Treasury has approved the advance payment or transfer.

3)	For purposes of the implementation of a Schedule 6 allocation to a municipality-

a)	Eskom Holdings Limited may receive funds directly from the transferring national officer of the Department of Energy;

b)	a water board, as defined in section 1 of the Water Services Act, 1997 (Act No. 108 of 1997), may receive funds directly from the transferring national officer of the Department of Water Affairs or the Department of Human Settlements.

a)	For purposes of the Human Settlements Development Grant, a receiving officer and a municipality with level one, two or three accreditation as at 1 April 2013, must, by the date determined by the National Treasury, comply with subsection (2) by-

i)	entering into a payment schedule; and

ii)	submitting the payment schedule to the National Treasury for approval.

b)	If a municipality receives accreditation after 1 April 2013, the National Treasury may approve that paragraph (a) applies.

c)	If the transfer of the Human Settlements Development Grant to a municipality with level three accreditation is withheld or stopped in terms of section 17 or 18, the receiving officer must request the National Treasury to amend the payment schedule in terms of section 23.

5)	If a function fully or partially funded by the Human Settlements Development Grant is assigned by a province to a municipality having a level 3 accreditation, as envisaged in section 10 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000)-

a)	funds from that Grant for the province for the function must be stopped in terms of section 18 and reallocated in terms of section 19 to the municipality which has been assigned the function;

b)	any project or contract regarding the function must, if possible, be finalised by the province before the date the function is assigned and, if not finalised, the province must notify the relevant municipality and the National Treasury;

c)	any project or contract regarding the function not finalised at the date at which the function is assigned, must be subjected to an external audit and the province and the municipality must enter into an agreement to cede to the municipality all contracts related to the function;

d)	money that is retained by the province for any contract related to the function that is not ceded to the municipality must be spent by 31 March 2014 and will not be available in terms of section 30 of the Public Finance Management Act or section 28(6)(c); and

the receiving officer of the province must submit to the national transferring officer and the National Treasury a list of liabilities attached to the function, that were not transferred to the municipality within seven days after the function is assigned to provide for the adjustment of the applicable allocations.

6)	Subsection (5) applies, with the necessary changes, if a function that is fully or partially funded by the Public Transport Operations Grant, is assigned by a province to a municipality, as envisaged in section 10 of the Local Government: Municipal Systems Act, 2000.

7)	A project funded by the Human Settlements Development Grant that is initiated after 1 April 2013, must be done in terms of an agreement with the municipality and aligned to the allocations for the municipality in the applicable framework.