Johannesburg - Use it properly or lose it. This is the lesson that Limpopo struggles to learn.
Last week, the National Treasury took away about R660 million in housing funds from Limpopo and handed it to four other provinces instead.
The move was in terms of section 19 of the Division of Revenue Act of 2014, which allows the Treasury to stop the transfer of certain allocations to a province.
This is done if the province has broken the law on the use of those funds, or if the Treasury believes the province will not spend the money before the end of the financial year, if the function the money is for is moved elsewhere, or if the province doesn’t comply with construction industry standards on infrastructure projects.
The end of the financial year is coming up at the end of March and the national Budget for 2015/16 is due to be presented in Parliament on Wednesday, so it’s likely that failure to spend is the reason.
Limpopo’s R559.5m was for the province’s Human Settlements Department and was part of the human settlements development grant for housing. It’s a conditional grant, which means it can’t be spent on anything else.
Limpopo’s full allocation for that grant was R1.22 billion, so it is losing about 46 percent of the grant.
The money will now be split as follows:
* KwaZulu-Natal (R236m)
* Eastern Cape (R233.5m)
* Mpumalanga (R70m)
* Western Cape (R20m)
The reallocations are in a Treasury notice.
Last year, Limpopo lost R1.3bn in grants that were stopped and redistributed to other provinces due to Limpopo’s inability to spend and financial irregularities.
The R1.3bn was mainly funds for the human settlements development grant (about R644m) and the provincial roads maintenance grant (about R638m).
The Star