Division of Revenue Bill

1
Division of Revenue Bill B9-2003 10
March 2003 Select Committee of Finance Maria
Ramos, Ismail Momoniat and Vuyo Kahla
2
Intergovernmental Fiscal System

• Section 214 of Constitution and IGFR Act
• Requires an annual Division of Revenue Bill
• Section 10(5) of the Intergovernmental Fiscal
  Relations Act gives effect to Constitution
• Consultation processes for all allocations
• Explanatory memorandum (Annexure E)
• Budget Council and Budget Forum
• FFC
• Extended Cabinet with provincial Premiers and
  chairperson of SALGA

3
2003 Division of Revenue Bill

• Section 76(4) Bill and has to start in NA
• Most important Budget Bill, not a s75 money bill!
• Clauses 1-35 of the Bill
• Schedules 1-7 divides revenue bet 3 spheres
• Memo on the objectives of bill
• Explanatory attachments
• Annexure E (also part of Budget Review)
• Appendix E1 E2 Frameworks on all conditional
  grants (provincial and local)
• Appendix E3 to E6 LG allocations by municipality
  for both national municipal financial year
• Appendix E7 on statistical data for LG equitable
  share

4
DOR Legislative Requirements

• Clauses 1-35
• Schedules 1 to 7A
• Equitable Share allocations (Schedules 1-3)
• Schedule 1 divides eq share between 3 spheres
• Schedules 2 divides provincial eq share between 9
  provinces
• Schedule 3 divides local equitable share between
  284 municipalities
• Conditional Grant allocations (Schedules 4-6)
• Schedules 4 and 5 on provincial grants, by
  province
• Schedules 6 on LG grants (no division by muni)
• Allocations by municipality in explanatory
  attachments
• Allocations-in-kind (Schedules 7 and 7A)
• Schedule 8 corrects one 2002 DoR allocation

5
Budget Review Chap 7 and Annexure E

• Chapter 7 summarises fiscal framework
• Provides equitable share and conditional grant
  allocations to provinces and local govt
• Annexure E provides greater detail
• Explanatory memo required by IGFR Act
• Five parts to Annexure E
• Part 1 Govts response to FFC proposals
• Part 2 with how how 10 factors in s214(1) of
  Const taken into account
• Covered in detail in Budget Review, esp in ch 6
  and 7
• Part 3 deals with fiscal framework,
• Part 4 and 5 provide details on prov/local
  allocations

6
2003 Budget Timeframes

• Tabling of Division of Revenue Bill with National
  Budget (DoR) 26 Feb 2003
• Tabling of provincial budgets
• 27 Feb to 12 March in terms of PFMA
• Tabling of provincial department strategic plans
  31 March 2003
• To precede portfolio committee hearings on
  departmental budget
• Publication of Intergovernmental Fiscal Review
  first week of April (2 or 3 April)

7
Dates of Provincial Budgets

• North West and Gauteng - 4 March 2003
• Free State - 5 March 2003
• E Cape, Mpumlanga KZN - 6 March 2003
• W Cape - 12 March 2003
• Limpopo - 13 March 2003
• Northern Cape - 17 or 18 March 2003 (granted an
  extension by Minister)

8
Provincial Budget Reforms

• Uniform budget and programme structures to enable
  comparability across provinces
• Education, Health Social Development
• Uniform measurable objectives and outputs per
  programme or main division
• To develop performance indicators for each
  measurable objective
• Sets performance reporting for 2003/04 annual
  report tabled Oct 2004
• Uniform format for HoD performance contracts?

9
2003 IG Fiscal Review (IGFR)

• Contains 2003 provincial budget info, and 2002
  municipal budget info
• Timing changed to coincide with budget hearings
• Allows each department to benchmark itself
  against other provincial departments
• How does share of departmental budget to total
  budget compare with other provinces?
• How much money is dedicated for non-personnel
  expenditure?
• Assessment of 2001/02 Provincial Annual Reports
  and 2003 Strategic Plans

10
Role of legislatures

• Critical that Parliament and Provincial
  Legislatures use non-fin budget info
• Is non-financial info linked to budget?
• Are there measurable objectives and performance
  targets
• end of year?
• In-year every quarter?
• Is performance contract of head of dept linked to
  strat plan targets
• No oversight, No performance, No delivery
• Budget hearings, quarterly reports, annual
  reports
• Delay portfolio hearings after IGFR (April)
• Challenge How will national and provincial
  portfolio and select committees co-operate to get
  the full picture??????

11
2003 Successes and Areas of Improvement

• Publication of all LG grants by formula
• Review of LG Fiscal System
• Areas of improvement
• Current formula all based on Census 1996
• Census 2001 and review of all formula
• Review of all conditional grants
• Publication of all CG formulae
• Better audits on conditional grants

12
2003 Successes and Areas of Improvement

• All six of nine provinces tabling their budgets
  have 3 year allocations per municipality
• Expect 3 remaining provinces to do the same

13
Fiscal Framework

• Part 2 of Annexure E

14
Fiscal policy

• GDP growth in 2002 of 3 rising to 3,3 in 2003,
  and 4 by 2005
• Deficit widened to 2,4 next year
• Real growth in non-interest spending of 4,5 a
  year over MTEF period
• Debt service costs decline from 4,2 in 2002/03
  to 3,8 by 2005/06
• Debt projected to drop to 36,8 by 2005/06
• Buoyant tax revenue provides for Personal Income
  Tax relief of R13,3 billion
• Capital spending by gen govt rises strongly

15
Summary of tax proposals

• Personal income tax relief of R13,3 billion
• Threshold rises to R30 000
• Interest exemption raised to R10 000
• Retirement Fund Tax reduced from 25 to 18
• Tax allowances for investment in inner city areas
• Several business stimulus measures
• Transfer duties reduced further
• Excise duties on vehicles reduced and eliminated
  on computers
• Inflation-related adjustment to excises on
  alcohol and tobacco products

16
Division of Revenue

• Macroeconomic objectives
• Tax-to-GDP, deficit etc
• First responsibilities
• Debt servicing
• Contingency reserve
• Total allocations
• Divide between the 3 spheres of govt (national,
  provincial and local)
• Take into account 10 criteria in section 214 of
  Constitution
• Fiscal capacity and functions of each sphere

17
National budget framework
18
Fiscal capacity and functions

• Provinces
• Raise 3.5 of own revenue
• Social services (85) and roads are public goods
• Local Government
• Raise over 90 of own revenue
• Only one third of functions are public goods
• Two thirds of functions are user charge services
• National Government
• Over half departmental spending on protection
  services
• Other national functions higher education,
  admin, policy or regulatory

19
Div of Rev (Table E3 Annex E)

• Revenue to be shared
• Revenue plus borrowing, exc RDP social security
  funds
• National share
• Declines, from 40,4 in 2002/03 to 38,9 in
  2003/04 and 38,0 at end of MTEF
• Provincial share
• Increases from 56,0 in 2003/04 to 56,8 in
  2003/04
• Increases to 57,6 at end of MTEF
• Increasing share driven by CSG extension
• Local share
• Increases from 3,6 in 2002/03 to 4,3 in 2003/04
• Static over MTEF

20
2003 Division of Revenue

• Starting point is 2002 Division of Revenue
• Additions to year 2 (2003/04), year 3 (2004/05)
• Total additions to 2002 baseline of R105,4 bn
• 2003 Budget shifts resources towards provinces
  and local governments
• Adjustments provide for higher inflation
• Provinces get R69,3 billion more over MTEF
• 6,1 annual average real growth in transfers
• Policy adjustment of R50,3 billion
• LG gets R7,3 billion more over MTEF
• 12,2 growth in local government transfers
• Policy adjustment of R6,7 billion

21
Division of additional amounts
22
Main policy additions
23
Policy priorities for 2003 MTEF

• Reducing poverty and vulnerability
• Extending the social security net
• Reinforcing the fight against HIV/Aids
• Providing free basic services
• Increasing infrastructure spending
• Accelerating land restitution
• Higher education and skills development
• Strengthening the fight against crime
• NEPAD and peace support operations

24
Provincial priorities for 2003

• Social Development
• Further expansion of the social security net
  (CSG)
• Real increases in values of social security
  grants
• Education
• Increasing spending on non-personnel non-capital,
  especially LSM, ECD, classroom backlogs
• Health
• Attracting personnel with scarce skills
• Further bolstering HIV/Aids programmes
• Refurbishing health infrastructure
• Increasing spending on INP
• Stepping up spending on medicines and other
  critical supplies taking
• Step-up support for other functions, esp.roads

25
Transfers to provinces

• National transfer to provinces
• Equitable share rises from R123 bn in 2002/03, to
  R142 bn in 2003/04 and to R168 bn in 2005/06
• Conditional grants which are R13 bn in 2002/03,
  R16,6 bn in 2003/04 and R24 bn in 2005/06
• Increase in conditional grants largely due to
  introduction of child support extension grant
  which rises from R1,1bn in 2003/04 to R6,4bn in
  2005/06
• Transfers to provinces grow by 6,1 a year in
  real terms

26
Local government priorities

• Extending provision of free basic services
• R4,1bn extra over the MTEF (incl. R1,4bn for
  electricity)
• Investing in municipal infrastructure
• R1,8 billion more, including R1bn for
  labour-based programmes
• infrastructure grants to be consolidated in
  future
• Reinforcing financial management reforms
• R300m set aside for this purpose

27
Transfers to local government
28
Reconciliation with DoR Bill

• Schedule 1 legal vs economic/functional
• National share-
• National allocation (appropriated and some direct
  charges)
• Debt servicing and contingency reserve
• Conditional grants (provincial and local)
• Provincial share
• Equitable share only, excludes cond grants
• Local share
• Equitable share only, excludes cond grants

29
Questions on Conditional Grants

• What does 2001/02 audit say about grant?
• What does national dept do on reporting and
  monitoring?
• Are monthly reports received on time?
• Were grants transferred on time?
• Was NT informed on any delays?
• Were reasons anticipated at time of Budget?
• Municipalities do not have capacity etc
• Are all allocations per province and municipality
  in terms of DoR in 2001/02 and current year?
• Do allocations appear on budget of municipality?

30
Response of National Govt to FFC Proposals

• Part One of Annexure E

31
Key Proposals on DoR

• Census 2001 results out this year
• Review of formula for provincial and LG equitable
  share grants
• Review of all conditional grants
• Review of LG Fiscal Framework
• Restructuring of electricity distribution
• Division of functions 3 Jan 2003
• Review of RSC and municipal service levy

32
Process to consider FFC proposals

• FFC Submission DoR 2003/04
• 6 provincial, 6 LG and 3 cross-cutting proposals
• 3 proposals are old (2001), and many others do
  not really deal with Division of Revenue
• National government responds to all proposals
• NT suggests FFC separate DoR from non-DoR
  proposals
• Budget Council considered prov proposals
• Budget Forum considered LG proposal
• Premiers invited at Extended Cabinet
• Cabinet decides on div of revenue thereafter

33
FFC Provincial Recommendations

• Provincial Own Revenue Sources
• Provincial Tax Regulation Process Bill (2001)
• Early Childhood Development funding
• Implications of HIV/Aids for Health, Welfare and
  Education Sectors
• Primary Health Care
• Framework for Comprehensive Social Security Reform

34
Response of N Govt to FFC provincial proposals

• NG agrees on first two proposals generally
• note Prov Tax Reg Act is now enacted
• Further consideration for specific tax proposals
• Agree on ECD funding thru equitable share
• Agree generally on cond grant of HIV/Aids, but
  difficult for total separation from dept budget
• Primary health proposals on further research
• Govt exploring sep agency for social grants
• Establish cond grant CSG extension in interim

35
FFC proposals on LG

• Division of powers between category B and C
  municipalities (2001 proposal, no NG response)
• Restructuring of electricity distribution
  industry
• Municipal Borrowing and financial markets
• Municipal Finance Management Bill
• Remuneration of municipal councillors (2001)
• Measurement of Revenue-Raising Capacity

36
Response of NG to FFC on LG

• Two proposals of FFC are on restructuring
• Comprehensive review of LG fiscal system
• Div of 4 fncs (water, sanitation, elec, health)
• 3 Jan 2003 Gazette by Min of PLG
• Govt agrees with FFC, but local views taken into
  account, so functions (esp for water
  sanitation) differ by region
• Further work on electricity restructuring
• Interim approach for 2003 MTEF
• further division of allocations between category
  B and C munis depending on function (DPLG)
• FBS window for electricity and water services
• Other proposals are old, research or dealt with
  in MFM Bill

37
FFC cross-cutting proposals

• Review of Intergovernmental System
• Centralised Contingency Reserve
• Assessment of Disaster Management Funding
• Response of NG
• Agree on comprehensive review of grants and LG
  fiscal system, better data collection
• Not clear what FFC means wrt its proposals on
  contingency reserve, as grants divided ito legal
  process, and see no need to divide into two pots.
  Agree to allow for emergency and adjustment
  provisions in MFM Bill
• Similarly not clear to NG why it should change
  its approach on funding disasters

38
Provincial Allocations

• Part 4 of Annexure E

39
Provincial revenue2003 MTEF
40
Provincial Allocations

• Total provincial share allocation increases from
  R136,9 bn in 2002/03 to R159,0 bn 2003/04 and to
  R191,6 bn at end of MTEF
• Biggest allocation to KZN at R32,2 bn in 2002/03
  (compared to R27,5 bn 2002/03)
• Next highest EC (R26,4 bn), Gtg (R25,8 bn)
• Lowest to NC (R3,8 bn)
• Equitable share R142,4 bn, or 89,5
• Conditional grant R16,6 bn

41
Total transfers to provinces 2001/02 to 2005/06
42
National transfers to provinces(1)

• National transfers make up 96,5 of total
  provincial revenue in 2003/04
• Equitable share makes up 89,5 of national
  transfers to provinces
• Rises from R123bn in 2002/03 to R142bn in 2003/04
  and will peak at R167bn by 2005/06
• ES grows an average annual rate of 10,7 over
  MTEF or 5 in real terms

43
National transfers to provinces(2)

• Conditonal grants grow from R13,5bn in 2002/03 to
  R16,6bn in 2003/04, and will rise to R24bn by
  2005/06
• Growth in CGs largely linked to
• Child support extension grant
• R1,1bn, 3,4bn and R6,4bn
• Food relief of R388m each MTEF year

44
Transfers to provinces 2003/04
45
Equitable share formula

• Jointly recommended by FFC and govt
• Adopted in 1998, full phase-in 2003/04
• System takes into account fiscal imbalances
• Seven factors taken into account
• No change to formula this year
• No update of data
• Comprehensive review this year for 2004 MTEF,
  using Census 2001

46
Components of the formula

• Education share - 41 per cent
• Health share - 19 per cent
• Social security share - 18 per cent
• Basic share - 7 per cent
• Backlog component - 3 per cent
• Economic component - 7 per cent
• Institutional component - 5 per cent

47
Summary of provincial ES formula
48
Equitable shares2001/02 to 2005/06
49
Actual allocations and formula

• Shares and formula beginning to diverge, compared
  to 2002/03 adjusted budget shares
• Social security share - 20,7 per cent
• Excludes R2 billion arrear allocation
• Three per cent more than original formula, and
  expected to RISE to 23 at end of MTEF
• Started at 17 two years ago
• Education share - 36,2 per cent
• Almost 4 per cent less than formula
• Health share - 15,4 per cent
• Excludes tertiary and training conditional grants
  worth R10,5 bn. Total health share is 22,8
• Health exc tertiary/training 3,6 less than
  formula

50
(No Transcript)
51
Conditional grants

• Legally from the national equitable share
• National priority programmes
• Compliance with national norms and standards
• Cross-border spill-overs
• Two types
• General or Assigned function (R7,9 bn)
• Provincial infrastructure, health tertiary
  training
• Specific purpose conditional grants
• Housing subsidy R4,2 bn, 5 other health R2,1 bn
• Total R16,6 bn in 2001/02
• Total Health R7,4 bn, Housing R4,4 bn, infras
  R2,5 bn
• Significant new grant Child Support Extension
• HIV/Aids R520 mil
• Formula for each grant varies (see App E2)

52
Local Govt Allocations

• Part 5 of Annexure E

53
LG Allocations

• National transfers to Local government increase
  by R5,8 billion
• In line with this LG receives the following
  additional allocations
• R4,1 billion of for free basic services
• R1,8 billion of infrastructure/ R1 billion of
  labour-based infrastructure
• R300 million for capacity building
• The equitable share rises from R3,9 bn in 2002/03
  to R7,7 bn in 2005/06
• Equitable share grows from 45 to 53 of total
  transfers to LG from 2002/03 to 05/06

54
(No Transcript)
55
Equitable share

• Equitable share (formula) grows from 45 to 53
  of total transfers in MTEF
• The equitable share rises from R3,9 bn in 2002/03
  to R7,7 bn in 2005/06
• An additional window of R4,1 bn for free basic
  services

56
Type of transfers
57
Local Govt Equitable Share

• Excludes Water operating and sanitation grant
  which is not allocated by formula, but to water
  schemes
• Six windows in LG equitable share
• Historic R293 personnel allocation (last year)
• Current Institutional I, Basic Services S, nodal
  allocation
• New FBS (general) and free electricity
• Guarantee of 70 of previous years allocation
• Further division between category B and C
  municipalities based on 2 Jan 2003 Gazette by
  Minister of PLG

58
Equitable share cont

• Equitable share allocation R6 343m
• Less R293 allocation R 381m
• Amount available R5 962m
• S-grant R4 178m
• I-grant R 450m
• Nodal allocation R 212m
• Free basic water,sanitation, refuse R 822m
• Free basic electricity R 300m

59
Equitable share cont

• R293 grant
• Window will be phased out in 2004/05, whereafter
  the 70 guarantee principle apply
• S-grant
• S-grant is divided between category B and C
  municipalities in line with functions performed
• S-grant split up Water (23), electricity
  (41,9), Sanitation (11,6), refuse (23,3)
• I-grant
• Grant allocations for district are now determined
  by the same formula as category B municipalities
• Free basic services
• Allocations determined by the S-grant formula and
  1996 Census data on municipal infrastructure for
  poor households

60
Equitable share cont

• No major changes introduced in 2003/04 except
• Reconfiguration with powers and functions
• Introduction of windows for free basic services
• Incorporation of transition grant
• Formula will be reviewed in 2003/04, to take
  account of
• 2001 Census results
• Revenue raising powers and future of RSC levies
• Feasibility of levies on electricity and water

61
Infrastructure Grants

• Grows from R4,1 bn to R4,9 bn over the MTEF
• R1,8 bn additional for new and rehabilitation
• R1 bn for labour-based infrastructure
• Beneficiaries
• Category A 16
• Category B 16
• Category C 68 (subject to further distribution
  to Bs)
• Allocation criteria or formulae in Appendix E2
• Need for greater transparency for future budgets
• Rationalisation of grants over the MTEF into new
  MIG (Municipal Infrastructure Grant)

62
Infrastructure cont

• Nodal areas receives priority
• 49 of the total infrastructure grants goes to
  nodes
• 84 of metropolitan munis allocations goes to
  urban development nodes
• 51 of district munis allocations goes to rural
  development nodes

63
Infrastructure cont

• Big grants such as CMIP and Water Capital
  allocate the bulk of their allocations to
  Category C municipalities
• In the case of CMIP allocations may be further
  distributed to category B munis
• These programmes are also prone to slow spending
  with huge transfers occurring at the end of the
  financial year
• Payment schedules are not honoured and amended
  without Treasurys knowledge

64
Phased introduction of MIG

• Infrastructure grants will be rationalised over
  MTEF into a single Municipal Infrastructure Grant
  (MIG)
• Commence with phased transition to a formula
  driven infrastructure grant
• Existing commitments will be honoured
• Inclusion of poverty relief grants subject to
  Cabinet review
• Electricity grant will be incorporated when there
  is more clarity on the restructuring of
  electricity industry

65
Metropolitan LG Allocations (2003-04 mun year)

• eThekweni (DBN) R506,2 mil
• JHB R364,0 mil
• Cape Town R291,6 mil
• Ekurhuleni R275,5 mil
• Tshwane R251,3 mil
• Nelson Mandela R210,6 mil
• National Total R11,5 bn
• Metros R1,9 bn or 16.5

66
District Council and Local Allocations (2003-04
mun year)

• Amatole munis (DCBs) R656,6 mil
• District Council R268,2 mil
• Buffalo City (EL) R234,9 mil
• uMgungundlovu munis R314,0 mil
• Msunduzi (PMB) R134,0 mil
• District Council R134,5 mil
• O.R. Tambo munis R708,1 mil
• Vhembe munis R395,6 mil

67
2003/04 Transfers to Category A, B and C
Municipalities
68
2003/04 Allocations to Selected
Municipalities(refer to Appendix E4-E6 of
Annexure E)
69
Capacity Building Grants

• R300 mil additional allocation over MTEF
• Further R233 mil shifted from provinces to
  national
• Schedule 2 Recurrent allocations and Schedule 4
  (page 30) on DPLG vote
• DPLG Municipal Systems Improvement Grant
• NT LG Fin Mgt Grant and Restructuring
• Provinces CMIP and MSIP
• Little info on outputs for capacity grants

70
Areas of Improvement for 2003 Division of Revenue
Bill
71
Improving Management of Conditional Grants

• Financial reporting on transfers is weakest part
  of accountability system
• DoR grants management improving since 2000
• First problem is simply to confirm all transfers
  made ito of DoR Bill
• 2001/02 financial statements too general
• 2002/03 financial statements will be more
  detailed, showing per grant per province and per
  municipality

72
Improving Management of Conditional Grants

• Second Issue is that all grants are budgeted for
  by the receiving province/municipality
• responsibility of transferring depart to confirm
• Third Issue is whether monthly reports are
  submitted (on time)
• Role of transferring dept to withhold if do not
  receive monthly report
• Forth issue is that grants tranferred if spending
  level is as planned
• No spending no transfer

73
Improving Management of Conditional Grants

• Fifth Issue is that annual report provides
  detailed info on outputs and performance
• no point to a conditional grant if a national
  dept unable to provide this detailed analysis
• Agree with Auditor-General that internal audit
  and audit committee must be improved to report on
  DoR compliance
• Should AG not issue a compliance report against
  DoR Act, even if this is merely to confirm all
  allocations?

74
NT capacity and restructuring grants

• NT financial management grant
• Municipal Financial Management Reform Programme
  initiated in 2000/1
• 39 pilot municipalities in 2002
• Expanding programme to 62 municipalities in 2003
• Financial Management Grant disbursed
• WB programme
• First phase - International advisors placed in 9
  munis
• Second phase further 10 to be placed in next
  three months
• Aligned to capacity building strategy and
  leveraging donor support
• Restructuring grant supports larger budget munis
  (R300 mil)
• Jhb and seed funding to 16 munis in 2002

75
2003 Division of Revenue Bill
76
DIVISION OF REVENUE BILL, 2003

• Bill largely same as 2002 Division of Revenue Act
• Clause nos are identical, and refer to same issue
• Substantive changes
• New section 5 to deal with earlier publication of
  LG allocations
• Section 5(7) a new approach to ensure LG more
  transparent
• Section 8 on national public entities performing
  municipal service functions
• Largely affects ESKOM and Water Boards
• Must become external mechanisms ito Mun Systems
  Act
• Sections 15 and 17 to obligate provincial
  publication of LG grants per municipality
• Changes due to earlier per municipal allocations

77
DoR Bill Parts I and II

• Definitions and Equitable Share
• S5- S5(1), (2), (3), (4), (5) and (6)
• Revised to recognise early publication of LG
  equitable share by municipality in Sched 3
• Formula published in Annexure E, so need for
  consultation process that has already happened
• No change to quarterly payments
• Substantive addition s5(7) will force
  municipalities to be more transparent whilst MFM
  Bill not applicable

78
DoR Bill Parts I and II

• S4 removes weekly before instalments, in
  recognition of better cash management
• new reforms to transfer in line with actual
  expenditure trends
• No other changes to sections 3,4 and 6
• Deletions of unnecessary definitions and
  objectives in section 1 and 2
• definition of SALGA, municipal public entity
• change to next financial year
• removal of fin management objective

79
DoR Part III (Other allocations)

• Section 8 has been substantially changed
• To get municipalities to take responsibility in
  line with Constitution
• Better accountability and reporting to
  municipality by national public entities that are
  effectively external mechanisms ito Systems Act
• S7- allocation to the provinces and those to
  municipalities are dealt with separately because
  of earlier publication of LG allocations by muni
  (hence addition of s7(6))
• S7(3) and (7) direct charges

80
DoR Part III (Other allocations)

• S9, 10, 11, 12 are essentially the same
• section 9 made shorter in light of s6(3)
• New s11(3) should be removed to be in line with
  2002 DoR Act
• New section 12(2) to make provision for reporting
  on s12(1)
• Revision of section 13
• Takes account of international assistance
  programme with World Bank for NTs financial
  management grant
• Widens scope of framework to cover IDP and
  performance management training
• Better reporting on outputs (to ensure LGs
  benefit, rather than consultants!)

81
DoR Part IV and V (Duties)

• No significant changes in Part IV
• Most imp change to s15 and 17 (read together)
• Relates to provinces also publishing municipal
  allocations per municipality with their budgets
• Need to allow for new allocations after prov
  budget through a new sub-clause s17(3)
• S18 refers to financial statements rather than
  annual report to ensure auditing by AG
• S20 on duty of AG
• Issue of how to audit for all transfers, to
  ensure they are in accordance with DoR Act
• Issue of special report by AG in section 20(1)
• AG view taken into account must changed into
  may
• New addition s20(2) to get better internal audit
  process

82
DoR Bill Part VI

• Standard, no change
• Obvious changes to reference to Schedule nos
• Recognise section 5(7) on withholding of LG
  equitable share in section 21 and 22(1)(b)
• Reallocations in s23 only allowed between
  municipalities in same district
• Section 24(1) adjusted to recognise earlier
  publication of LG allocations
• Section 34 has new (1) and (2) to take account of
  mistakes to 2002 DoR Act on DWAF allocation
  (corrected in Schedule 8 in this Bill)