Division of Revenue Act, 2017 (Act No. 3 of 2017)NoticesAllocations to Provincial and Local GovernmentsExplanatory Memorandum to the Allocations set out in the attached ScheduleChanges to local government allocations |
Re-allocation of funds between municipalities
| 4. | The Neighbourhood Development Partnership Grant (NDPG 5B and 6B) is being stopped from 13 and re-allocated to 6 municipalities (in terms of section 19 and 20 of DoRA respectively) due to slow procurement processes and significant under spending of the 2017/18 grant allocation. These funds will be re-allocated to municipalities that have fast tracked the implementation of their projects and have accelerated expenditure against their original allocations, also have capacity and capability to absorb additional allocations. |
| 5. | The department of Energy (DoE) is stopping and re-allocating funds between municipalities, under the Integrated National Electrification Programme (INEP 5B) due to under performance by municipalities against their 2017/18 allocation. |
| 6. | The Infrastructure Skills Development Grant (ISDG) is stopping from Enoch Mgijima Local Municipality (LM) and Rand West City LM amounts of R1.8 million and R2.1 million respectively. The stopped amounts are being re- allocated to eThekwini Metropolitan municipality in KwaZulu -Natal, Polokwane LM in Limpopo and George LM in the Western Cape due to institutional and managerial issues in Enoch Mgijima LM and Rand West City LM rendering ISDG implementation non prolific. |
| 7. | The department of Water and Sanitation (DWS) is stopping and re-allocating funds between municipalities for the two grants, namely: the Water Services Infrastructure Grant (WSIG 5B and 6B) and the Regional Bulk Infrastructure Grant (RBIG 5B and 6B). The reason for stopping the allocation is due to underperformance by municipalities on the direct component (Schedule 5B) and the fact that DWS anticipates underspending against the indirect component of the grant allocation (Schedule 6B). |
Roll-over of funds for the municipal demarcation transition grant
| 8. | An amount of R27.9 million is rolled-over for the municipal demarcation transition grant for funds originally allocated to municipalities in KwaZulu-Natal in 2015/16. These funds were initially rolled-over in 2016/17 after the funds had been converted from a direct to an indirect grant allocation at the end of 2015/16. However, the conversion occurred very close to the end of the financial year, leaving too little time for the funds to be spent. The funds were rolled -over in 2016/17 as an indirect grant but went unspent as the modality for spending them as an indirect allocation could not be agreed on. In 2017/18 they will now be rolled -over as a direct grant and transferred to municipalities to reimburse their expenditure incurred in line with the conditions of the grant in preparation for the municipal mergers that came into effect in August 2016. |
Additional allocations to support disaster relief and recovery
| 9. | R26.1 million has been allocated for the repair of sinkholes and the damage to infrastructure resulting from sinkholes in the area of Merafong City Local Municipality. These funds will be allocated through the municipal disaster recovery grant (this grant will have to be reactivated in the 2017 Division of Revenue Amendment Bill). These changes are shown in Schedule 5, Part B of the Bill. |
| 10. | For 2017/18 the allocation for the indirect regional bulk infrastructure grant will be increased by R200 million for Butterworth's emergency water supply scheme to respond to drought pressures. These additional funds will be spent by the national Department of Water and Sanitation on behalf of the municipality in order to leverage economies of scale in purchasing. The assets will be transferred to Chris Hani District Municipality after completion. These changes are shown in Schedule 6, Part B of the Bill and in Annexure 6 to the Bill. |
Correction of rounding error in the Public Transport Network Grant allocation Baseline
| 11. | In the 2017/18 Public Transport Network Grant allocations, the allocations submitted had decimals and due to formatting, the decimals were not apparent. On the excel file submitted the total baseline allocation for the grant is reflected correctly as R6 159 559. However, when manually adding the individual allocations to the municipalities, the total for the grant becomes R6 159 560, meaning it is over by R1 000 as a result of the decimals. Department of Transport (DoT) as the Transferring Officer wrote to the municipality affected - being Buffalo City in this case as recommended by DoT - to request concurrence to reduce their allocation by R1 000, to which the municipality agreed. DoT then wrote to National Treasury requesting correction of this error, which is to be corrected with this gazette. |
Additional allocation for bucket eradication programme
| 12. | The allocation for the bucket eradication programme is increased by R265 million to allow the national Department of Water and Sanitation to continue bucket eradication projects that the department had identified and committed to implementing (i.e. for the eradication of bucket sanitation in formal areas). This increase is funded through the reprioritisation of funds within the department from compensation of employees (R45.1 million), payments of capital assets (R214.5 million) and goods and services to support indirect water services infrastructure grant (R5.4 million). |
| 13. | The changes are reflected in Schedule 6, Part B of the Bill and more details of the allocations per municipality are in Annexure 6 to the Bill. These reprioritised funds will add to the R385.6 million allocated for the bucket eradication programme in formal settlements at the beginning of 2017/18 within the regional bulk infrastructure grant (R240.6 million) and water services infrastructure grant (R145 million). The eradication of bucket sanitation in informal settlements continues to be funded through the urban settlements development grant and the municipal infrastructure grant. |