JOINT PROGRESS REPORT BY DCOG AND PUBLIC
WORKS ON PAYMENT OF INTERGOVERNMETAL DEBT
PRESENTATION TO PORTFOLIO
COMMITTEE ON COGTA
Tuesday, 22 May 2012
PURPOSE
 To brief the portfolio Committee on
progress made in by the task team
terms of payment for intergovernmental
debt
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OVERVIEW OF PRESENTATION
1. Introduction
2. Background
3. Status of municipal debt
4. Progress on payment of intergovernmental debt
5. Challenges
6. Wayforward
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Introduction
 The presentation seeks to provide progress since
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29 November 2011
This is the summary of what was done by the task
team of the steering Committee of the NT,
COGTA, DPME and PW
The figures shown here are for quarter 1 and
quarter 2
Quarter 3 reports are expected to be released in
the next two weeks
The figures that will be presented will give a
breakdown per province
BACKGROUND
 On the 3rd June 2011 the National Steering Committee
was established to act on government debt.
 The Steering Committee comprises CoGTA, DPME,
National Treasury and National Public Works.
 The Task Team piloted the first phase of the debt reduction
project by analysing outstanding government debt due to
eThekwini and Port St Johns municipalities.
 The next phase targeted eighteen municipalities identified
with the highest government debt balances according to
the NT’s section 71 publications
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GOVERNMENT DEBT BREAKDOWN PER
PROVINCE PER QUARTER: SEPTEMBER &
DECEMBER 2011
Government debt comparison per province: September & December 2011
Province
As at 31
December 2011
Increase or
decrease
363 335
252 996
Free State
359 576
439 890
Gauteng
869 669
744 478
(125 191)
(17)
1 020 623
971 364
(49 259)
(5)
Limpopo
221 876
256 178
34 302
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Mpumalanga
253 691
219 519
(34 172)
(16)
North West
455 000
351 248
(103 752)
(30)
Northern Cape
234 672
170 675
(63 997)
(37)
Western Cape
140 707
3 919 149
107 277
3 513 625
(33 430)
(405 524)
(31)
(12)
TOTAL
(110 339)
Increase or
(decrease) in
%
Easern Cape
KwaZulu Natal
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As at 30
September
2011
80 314
(44)
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GRAPHICAL ILLUSTRATION OF GOVERNMENT
DEBT COMPARISON PER PROVINCE: SEPTEMBER
& DECEMBER 2011
GOV DEBT (1ST & 2ND QUARTER OF MUN FIN YEAR)
1,200,000
1,000,000
R 000
800,000
600,000
400,000
200,000
0
1 ST QUARTER
2ND QUARTER
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1
363,335
252,996
2
359,576
439,890
3
869,669
744,478
4
1,020,623
971,364
5
221,876
256,178
6
253,691
219,519
7
455,000
351,248
8
234,672
170,675
9
140,707
107,277
PROGRESS ON PAYMENT OF INTERGOVERNMENTAL
DEBT
 The above table and bar charts shows the debt
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breakdown as at the end of the first and second
quarter of the municipal financial year
The figures shows an improvement in government
debt paid to municipalities
The positive movement is shown in seven of the nine
provinces
FS and Limpopo has recorded an increase of debt by
national and provinces to municipalities
This is in part due to the verification processes taking
longer than expected
GOVERNMENT DEBT AGE ANALYSIS
(SEPT-DEC 2011)
Government Debtors Age
Analysis
Sep-11
Dec-11
0 - 30 Days
705 015
413 738
31 - 60 Days
275 742
247 597
61 - 90 Days
364 904
262 097
2 562 395
2 589 742
3 908 056
3 513 174
Debtors Age
Over 90 Days
T otal
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CHALLENGES
 The splitting of accounts into rates and municipal
services is delaying verification (This is so
because municipalities uses a comprehensive
billing systems).
 High
rate of management turnover in
municipalities affecting
the sustainability of
government debt initiative.
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Future Action
 The task team will work on providing the committee with a
break down per municipality and debt age analysis
 That information will also provide information prior the
devolution (a period up to the 31 March 2008).
 The Task Team will continue to work with PW and
municipalities in verifying the debt for payment
 Work with Rural Development and Land Reform together with
NDPW to facilitate the vesting of properties and vacant land.
 Work with Human Settlement to facilitate endorsement of
housing board properties and R293 townships.
 Reconciliation of state immovable asset registers for all three
spheres of government.
 Encourage municipalities to enforce credit control action
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(disconnecting services
Future Action
 Task team will conduct municipal visits to assist
municipalities with the debt collection process once the
municipality has submitted the information verified
 COGTA has identified the 5 priorities to focus on in
fastracking LGTAS and one of them is promoting sound
financial management
 The amendment of the MPRA will further assist in proper
categorization of PSI like school
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PAYMENT OF NON RETURNING
COUNCILLORS UPDATE
 We have 3690 Councilors that had to be paid
 930 submission not yet received
 2398 have been paid out of the 2670
 272 still awaiting tax directive from SARS
 Not all of the 2398 received their monies
 305 have been declined by SARS and these have
been advised to contact SARS directly
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