1. 1 WELCOME TO THE DEPARTMENT OF PUBLIC WORKS LIMPOPO PROVINCE IMPLEMENTATION OF CONDITIONAL GRANTS REPORT FOR THE PARLIAMENT IN CAPE TOWN 7 MAY 2010

2. 2 PRESENTATION OUTLINE. 1. INTRODUCTION 1.1 Project Description 1.2 Prevailing Scenario 2. DATA ON TRENDS IN ALLOCATIONS 2.1 Data trends in allocations 2.2 Actual expenditure 3.TURN AROUND STRATEGY 2.1 Project Scope 2.2 Project structure 4.CONCLUSION.

3. 3 INTRODUCTION Project Description: The Devolution of Rates and Taxes project’s approach is based on a list of devolved rates and taxes properties list provided from National Department of Public Works. The total devolved properties are 3557, and the Provincial department has received a grant of up to R12 million to pay the devolved rates and taxes from the National Treasury for 2008 / 2009 and R13,7 million for 2009/ 2010Financial Year respectively. The Devolution of Rates Funds Grant has gone over two years now, and the Provincial Department of Public Works took charge of the Conditional Grants on the Devolution of Rates as against the other Rates which are paid by various Provincial Departments according to usage.

4. 4 INTRODUCTION CONTD. Prevailing Scenario : The Provincial Government through Exco. Decision No. 59 / 2001, decided that “payments of rent, water, electricity and rates” be paid for by individual departments for the building they occupy. Therefore, since 2001, the Department of public Works did not pay for rates to municipalities on land parcels where respective provincial departments reside. The Department of Public Works only paid for rates to municipalities on state buildings where Provincial Departments jointly occupy state building and where the Department of Public Works occupies alone.

5. 5 INTRODUCTION CONTD. Prevailing Scenario : The above scenario implies that: There are provincial land parcels whose rates to municipalities are paid for by National Department of Public Works. There are provincial land parcels whose rates to municipalities are paid for by the Provincial Department of Public Works; There are also provincial land parcels whose rates to municipalities are paid for by the various Provincial Departments.

6. 6 DATA TRENDS IN ALLOCATION 2010/2011 marks the third year for the province to manage the payment of rates and taxes for devolved properties The elapsed period (2 financial years) does not provide the Dept the confidence to determine patterns and trends in funds allocation and expenditure The collection of data in the coming years will afford the Department with the means to determine trends that will assist with projections allocations and expenditure

7. 7 DATA TRENDS IN ALLOCATION Financial yearAmountExpenditureVariance 2008 / 2009R12 294 000R6 853 000R5 441 000 2009 / 2010R13 776 000 R8 151 133R5 624 867

8. PAYMENTS EXPRESSED IN PERCENTAGE ItemFinancial Year% Payment% Balance 12008/200955.7444.26 22009/201059.1740.83 8

9. EXPENDITURE Department initially reported nil expenditure during the previous appearance before the committee Final figures for the year shows an improvement over the remaining period as well as improvement compared to the 2008/2009 financial year Efforts put in place for improvement were both administrative and political initiatives On political level, the MEC engaged councilors and mayors including fellow MPLs on various occasions like the Premier / Mayors’ Forum, Inter-Govt Forum and some ad-hoc meetings 9

10. EXPENDITURE Administratively, officials interacted with municipalities’ officials on a provincial level, at district level where individual municipalities were met to reconcile accounts Figures indicate that change in approach resulted in expenditure increasing from 54% to 59% over the 2 year period The 4% improvement was encouraging and it led to intensification of aggressive turnaround strategy by approaching the process as a project – to be implemented using project management principles to address identified challenges 10

11. THE PROJECT - INTRODUCTION Problem Statements : The following were challenges experienced since inception while attempting to pay municipalities for the devolution of rates and taxes : Identification of devolved properties per region per municipality Collection of bills from municipalities. Exclusion of consumption and arrears from municipality bills Interfacing Bass system and the iE-Works System. Few System errors on iE-Works. Lack of Real Estate Human Resources capacity. Bills with opening balances from previous years. Interest on late payments. The monitoring Capacity of the Department for 2009/2010 was not adequate in terms of warm bodies;. 11

12. THE PROJECT - IDENTIFIED RISK Risk: The above challenges present the following risks; –Properties without valuations. –Properties sharing the same ERF number in different plots. –Wrong rebates and tariffs in the system. –Double payments. –Wrong Bills from municipalities. –Properties without account numbers. –Cross boarder properties. 12

13. TURN AROUND STRATEGY Project Scope : Due to the challenges and risks listed above; a new initiative has been undertaken to document, plan and execute a Devolution of Rates and Taxes Project. The scope of this project is limited to the 3557 properties devolved from the National Department of Public Works. The project involve Real Estate and Finance users at head office and regions in the Limpopo Department of Public works; the GITO directorate will manage the project and provide ICT infrastructure support. The project scope envelope amongst others the following; 13

14. TURN AROUND STRATEGY Project Scope : Devolution of rates and taxes properties limited to 3557 as provided District to continue identifying and verifying properties in the devolution list Payment of Rates and Taxes in the devolution list Real Estate managers at the regions will champion the project The finance directorate’s resources will be available to authorize payments in the iE-Works system in each region/district. ICT resources will be available to support users 14

15. TURN AROUND STRATEGY Project Structure Whilst the Department is busy restructuring to ensure the capacity is increased to address the shortcomings, the interim Project Structure is being established with key roles and responsibility. It should be noted however, that the project structure is not the organizational structure of the department. The ranking and responsibilities of the public servants on the organization structure of the department remains the same as authorized by the accounting officer [HOD] and HR section of the department. 15

16. TURN AROUND STRATEGY Project Structure There are monthly meetings between the department and municipalities at district level. Quarterly meetings with SALGA form part of the plan. It is anticipated that the above project will be successfully implemented because one of the critical success factor is that the 2001 Exco. Decision has been rescinded to enable the Department to be fully responsible for the payments of Rates & Taxes for the entire Provincial property portfolio including devolved properties. 16

17. 17 4.CONCLUSION. In conclusion, it is hoped that interaction with these stake holders will improve the relationships that will lead to a better service delivery and enable the partners to have a harmonious understanding to create a platform conducive to good governance. THANK YOU