Division of Revenue Bill: Formal Consideration of NCOP Amendments

Meeting report

FINANCE PORTFOLIO COMMITTEE
20 March 2002
DIVISION OF REVENUE BILL: FORMAL CONSIDERATION OF NCOP AMENDMENTS

Chairperson: Ms Hogan (ANC)

Relevant Documents
Division of Revenue Bill (B 5B - 2002)
Select Committee Amendments to Division of Revenue Bill [B 5C - 2002](Not available)
Division of Revenue Bill [B 5D - 2002] (Not available)

SUMMARY
National Treasury took the Committee through the amendments proposed during the NCOP process. The Committee accepted the amendments and adopted the Bill. There were two errors of a grammatical and technical nature which the Committee picked up and the Bill will be amended accordingly.

MINUTES
Mr Kahla (National Treasury) briefed the Committee on the amendments. He said that there are no major amendments as most were of a technical nature. The more substantive changes were the following:

Clause 1
The definition of municipal accounting officer is extended to provide that if there is no municipal manager,then the council can delegate a person to perform the function of an accounting officer.

There is an amendment to the definition of next financial year. The definition as it stood made a distinction between the financial year of National and Provincial Government and that of municipalities. All transfers however are processed in terms of the final year of National and Provincial government so the definition is amended to only refer to the National and Provincial spheres.

A new definition of municipal public entity is included in the Bill. It is necessary because the Bill as it stood referred to public and private entities in Clause 8. The Auditor General submitted that there is a problem with transfers to private entities and the Treasury agreed. It was Treasury's intention that transfers go only to entities under municipal control but the Public Finance Management Act only defines public entities. Because there is no definition for municipal public entities, one needs to be included in this Bill.

Clause 16
There are instances where a province makes a transfer to a municipality. That municipality does not spend the money and transfers it to another municipality. This issue was raised by the Eastern Cape and as a result, there are two new clauses 16(3) and 16(4) to regulate this kind of behaviour.

Ms Taljaard (DP) commented that this provision should be in the Municipal Finance Management Bill.

Ms Hogan replied that the MFM Bill is not yet passed and the provision is needed.

Mr Kahla agreed with the concern of Ms Taljaard but said that for now the clause is needed.

Clause 20 (c)
The clause in the B version of the Bill obliges the Auditor General to report whether in any monthly report or annual report there was any deliberate attempt to provide misleading information. The Auditor General submitted that the clause was contrary to its mandate and felt it encroached on a function of Parliament. The clause was therefore amended to say that the Auditor General must report on the evaluation of evidence supporting the amounts and disclosures in monthly and annual reports contemplated in this Act.

A grammatical problem in clause 21(1) was highlighted when Ms Hogan suggested that the word 'with' be added. It will now read, "if the National Treasury deems it appropriate, with the relevant provincial treasury…"

Schedule 4
Mr Kahla said that the schedules to the Bill had been amended because the columns were not properly named. The only significant changes were in Schedule 4. The previous version referred to a HIV / AIDS counseling and testing grant. After discussion in Treasury it was found that the grant had been incorrectly described. It is now called the HIV / AIDS Health grant. Because the name has changed, the listed purposes of the grant had to be changed. In addition to the purpose of counseling and testing the following are added: home-based care, prevention of mother-to-child programmes and other HIV / AIDS related matters.

There is a legal requirement that grants can only be used for its listed purpose and the initial purpose was too limited, especially since there are resources for the other purposes.

Ms Taljaard advised that the one purpose should be the prevention of mother-to-child transmission programmes. The word 'transmission was left out'.

Ms Hogan said that the word needed to be added.

The reference to the home-based care grant under the Social Development Vote is an error and it should be the community-based care grant.

Prof. Turok raised the concern that he was not convinced that Municipal Improvement Districts are not included under the Definition of Municipal Public Entity.

Ms Taljaard advised that it could be covered under section 78 of the Municipal Systems Act that goes into the full gambit of the matter.

Mr Kahla advised that he would look into it.

Ms Taljaard picked up on her earlier point that the inclusion of provisions in this Bill that belong in the MFM Bill pre-empt the debate that is still taking place in respect of the MFM Bill. She was worried about any inconsistency.

Ms Hogan said that any such issues should be noted and raised when the Committee deals with the MFM Bill.

Mr Kahla said that the inclusion of those types of provisions is purely for this year. Next year the Bill will be much smaller. He added that Treasury agrees with the concerns raised by Ms Taljaard.

Ms Hogan read the report of the Committee. The members agreed to the Bill.

The meeting was closed.