Mr. TB Mothogoane 21 December 2012
CHIEF DIRECTOR: LOCAL GOVERNMENT BUDGET ANALYSIS NATIONAL TREASURY
PRIVATE BAG X 115 PRETORIA
0001
Dear Sir
RE: UNSPENT CONDITIONAL GRANTS TO REVERT BACK TO NATIONAL REVENUE FUND
The above matter bears reference:-
The municipality noted that the equitable share allocation for the month of November has been reduced by an amount of R12.2 million which, according to National Treasury, was to repay the unspent portion of MIG funds for the 2010/11 financial year.
Whilst we comprehend that the National Treasury utilized the information submitted in the form of Annual Financial Statements for the 2010/11 financial year, the municipality is of a strong view that the disclosure in the financial statements is incorrect and
consequently misleading to the National Treasury and the users of the AFS.
Although the financial statements were prepared by the Consultants, the municipality takes responsibility of the incorrect presentation of information on the AFS. The
municipality’s position that the MIG funding disclosure was incorrectly disclosed in the AFS was confirmed by the audit process of the AG which disclaimed, together with other classes of transactions and account balances, the unspent portion of conditional grants (MIG in particular). Attached is the copy of the AG’s report for your ease of reference.
According to our accounting records, the MIG funding was spent as follows;
Description Amount
Amount allocated and transferred R13 801 984.43
Roll over funds R956 439.13
Total Available For Spending in 10/11 FY R14 758 423.56 Payment Certificates processed and paid during 10//11
FY R11 089 624.30
Committed Funds at year end/Unspent funds R3 668 799.26 Payment Certificates processed and paid
subsequent 2010/11 FY
R3 668 799.26
Actual unspent portion of MIG funds 0.00
We have attached MIG reports sent to Coghta department for your reference as supporting documentation to the expenditure. Furthermore, some of the expenditure vouchers are attached however others were confiscated by the Special investigations Unit.
The withholding of the funds has had a devastating impact on the financial status of the municipality to an extent that the ability of the municipality to render basic services might be impacted in the near future should the funds not be released to the Municipality.
In an attempt to improve compliance with DoRA and other legislative requirements, the municipality has developed an operation clean audit action plan to ensure accurate and timeous spending of all conditional grants allocated to the institution.
It is on the basis of the above that we request National Treasury to release the R12.2 million to the municipality.
Hope you find the above in order.
For any further enquiries please contact the chief financial officer, Mr. TB Mothogoane at 014 543 2004 (O.H)/ 082 825 9212 or email to [email protected]
Yours faithfully
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