Hon Deputy Chairperson, the Select Committee on Appropriations convened a hearing with the national and provincial Departments of Public Works and National Treasury on 24 May 2011. The hearing emanated from the provincial expenditure report published by National Treasury on 3 March 2011. The deliberations focused on the spending levels of the Devolution of Property Rate Funds Grant for the third quarter of the 2010-11 financial year. The provincial departments of public works invited to the hearings included the Eastern Cape, Gauteng, Limpopo and KwaZulu-Natal.
In its findings the committee noted the report from the National Treasury that the provincial Departments of Public Works had spent only R986,7 million, or 49,7%, of the total adjusted grant budget of R2 billion by 31 December 2010. Gauteng province, at only 0,5%, had spent the least, followed by KwaZulu-Natal province at 40,9%, the Eastern Cape at 47,4% and Limpopo at 50,0%.
The underexpenditure in the third quarter was attributed to challenges regarding invoicing by municipalities, specifically the Eastern Cape province, Gauteng province, KwaZulu-Natal province and Northern Cape province, and incomplete provincial asset registers in respect of immoveable assets. National Treasury noted the progress made in KwaZulu- Natal province and the Western Cape province in resolving the issue of the registration and management of immoveable government properties by engaging in intergovernmental forums between the provincial departments of public works and municipalities.
The issue of government properties such as schools and clinics on unsurveyed and unregistered land was brought to the attention of the committee by the Eastern Cape provincial department of public works. The department indicated that the problem was that the Local Government: Municipal Property Rates Act does not make provision for payment of rates and taxes on properties that are located on unsurveyed or unregistered land and that the department was therefore seeking a legal opinion on this matter.
The Eastern Cape further raised the matter of the outstanding arrears of the national department prior to the function being devolved on 30 June 2003. The provincial department was being charged interest on these outstanding balances as at 1 July. The total outstanding amount claimed by various municipalities amounts to R10,678 million and the department is calling for some form of intervention by the national department.
On the basis of these deliberations it is the committee's conclusion from that low expenditure against this grant is still attributed to challenges existing in the municipal sphere, such as low capacity within municipalities; incorrect invoicing practices related to the application of taxes, rates and municipal services; late or nonsubmission of invoices; and incomplete valuation rolls and property valuations.
The lack of complete and credible asset registers in most provinces remains a contributory factor to the low expenditure of this grant.
Some intergovernmental forums have proved successful in resolving some of the capacity issues at municipal level, which has resulted in improved grant expenditure. This has been the case in the KwaZulu-Natal and Western Cape provinces.
Outstanding municipal bills prior to devolution of the property rates function from the national sphere to the provincial sphere has become problematic for some provinces, as their current allocations do not make provision for this outstanding debt.
We therefore, as the committee, recommend that the national Department of Public Works should ensure that provinces institute project plans containing time-frames and augmented by progress reports, in terms of which the process of registering and valuing provincial properties could be addressed.
Secondly, the national Department of Public Works should intervene and resolve the issue regarding outstanding municipal bills prior to the devolution of the property rates function from the national sphere to the provincial sphere, as municipalities are charged interest on these outstanding amounts, which raises the spectre of wasteful expenditure.
Thirdly, the national Department of Public Works should take steps to ensure that best practices and lessons learned in improving expenditure by the Western Cape and Kwazulu-Natal provinces are transferred to other provinces.
Lastly, we recommend that the Gauteng provincial Department of Infrastructure Development should submit to this House a detailed action plan on how the department will resolve the billing issue relating to municipalities that have been reported to the committee as being "nonresponsive". They should further report on the billing issues in the Lesedi, Nokeng Tsa Taemane and Westonaria municipalities, and, specifically, the nonallocation of grant funding to the Kungwini Municipality. I thank you. [Applause.]
Debate concluded.
Question put: That the Report be adopted.
IN FAVOUR: Eastern Cape, Free State, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape, North West, Western Cape.
Report accordingly adopted in accordance with section 65 of the Constitution.
Chairperson, I just want to enquire if it is parliamentary for one member to tell another member that he is going to "bliksem" him. [Laughter.]
Hon member, please will you sit down? Thank you.
But I am very serious! I am asking if it is parliamentary if one member tells another member that he is going to ...
Are you pointing at me?
Hon member, can you please resolve whatever the problem is between the two of you. Please obey the ruling and sit down.
Deputy Chairperson, it is not my problem. The hon Mokgoro told the hon Maine, the youth leader of North West, that ...
Which actually complicates the case! [Laughter.] Hon member, please sit down. [Laughter.]
I just want to give hon Sinclair clarity and say that "bliksem" is not a swearword; it's Afrikaans for "donderweer" [thunder]. [Laughter.] It has nothing to do with a swearword. That's just for clarity, Chair. [Interjections.] It has nothing to do with a swearword. Oom George [Uncle George], don't worry. [Laughter.]
Hon Bloem, thank you.