1 of 2010: Division of Revenue Act, 2010.
(English text signed by the President.
(Assented to 31 March 2010.
To provide for the equitable division of revenue raised nationally among the national, provincial and local spheres of government for the 2010/11 ï¬nancial year and the responsibilities of all three spheres pursuant to such division; and to provide for matters connected therewith.
''accredited municipality'' means a municipality accredited in terms of section 10(2) of the Housing Act, 1997 (Act No. 107 of 1997), to administer national housing programmes; ''category A, B or C municipality'' has the meaning assigned to each category in terms of the Municipal Structures Act; ''conditional allocation'' means a conditional allocation to a province, local government or municipality from the national government's share of revenue raised nationally, contemplated in section 214(1)(c) of the Constitution of the Republic of South Africa, 1996; ''corporation for public deposits account'' means a bank account of the Provincial Revenue Fund held with the Corporation for Public Deposits, established by the Corporation for Public Deposits Act, 1984 (Act No. 46 of 1984); ''ï¬nancial year'' means the ï¬nancial year commencing on 1 April 2010 and ending on 31 March 2011; ''framework'' means the conditions and other information in respect of a conditional allocation published by the National Treasury in terms of section 14; ''Municipal Finance Management Act'' means the Local Government: Municipal Finance Management Act, 2003 (Act No.
in relation to a Schedule 4, 5 or 8 allocation transferred to a province, means the accounting officer of the provincial department which receives that allocation or a portion thereof for spending via an appropriation from its Provincial Revenue Fund; or in relation to a Schedule 4, 6, 7 or 8 allocation transferred to or provided in kind to a municipality, means the accounting officer of the municipality; ''this Act'' includes any framework or allocation published, or any regulation, determination or request made or instruction given under this Act; ''transferring national officer'' means the accounting officer of a national department that transfers a Schedule 4, 5, 6 or 8 allocation to a province or municipality or spends a Schedule 7 allocation on behalf of a municipality.
promote transparency and equity in the resource allocation process; and promote accountability by ensuring that all allocations are reï¬ected on the budgets of receiving provinces and municipalities, and by ensuring that the expenditure of conditional allocations is reported on by the receiving provinces and municipalities.
Revenue raised nationally in respect of the ï¬nancial year must be divided among the national, provincial and local spheres of government for their equitable share 5 allocations as set out in Column A of Schedule 1.
Column B of Schedule 1.
ï¬nancial years, is set out in Column B of Schedule 2.
ï¬nancial years, is set out in Column B of Schedule 3.
2010, 30 November 2010 and 25 March 2011, in accordance with a payment schedule 30 determined by the National Treasury in terms of section 21.
authorise expenditure in accordance with section 25.
Schedule 8, specifying incentives to provinces to meet targets with regards to 15 priority government programmes.
Acts in respect of those ï¬nancial years, is set out in Column B of the Schedules referred 20 to in subsection (1).
Schedule 8, specifying incentives to municipalities to meet targets with regards to priority government programmes.
Column B of the Schedules referred to in subsection (1).
and (2) in the Gazette in terms of section 14.
ï¬nancial year that will not be altered downwards in the Division of Revenue Acts in respect of those ï¬nancial years.
ï¬nancial year, for the purpose of securing a loan or any other form of ï¬nancial or other support from that person or institution.
(a) Subsection (1)(b) does not apply to the Municipal Infrastructure Grant (Cities).
Municipalities that receive the Municipal Infrastructure Grant (Cities) are only required to report expenditure and non-ï¬nancial performance information against their capital budgets, in accordance with the requirements of section 71 of the Municipal Finance Management Act.
deposit funds only into the primary bank account of a province or municipality, or, where appropriate, into the corporation for public deposits account of a province or the bank account designated for the transfer of the Gautrain Rapid Rail Link Grant; and ensure that all other arrangements or requirements as stipulated in the Act or in the relevant framework for the particular allocation necessary for the transfer of an allocation have been complied with prior to the start of the ï¬nancial year, and are complied with throughout the ï¬nancial year.
The transferring national officer for the Human Settlements Development Grant, after consultation with the receiving officer and the National Treasury, must determine the allocations for each accredited municipality by 14 April 2010, and submit those allocations to the National Treasury by 30 April 2010, for publication in the Gazette.
complying with the framework for a Schedule 4 allocation as published in terms of section 14; and the manner in which it allocates and spends a Schedule 4 allocation.
non-ï¬nancial performance against programmes, in respect of Schedule 4 allocations other than the Municipal Infrastructure Grant (Cities); and performance for that quarter against the targets stipulated in the infrastructure performance framework that is required in terms of the allocation framework, in respect of the Municipal Infrastructure Grant (Cities).
The National Treasury must make the report submitted to it in terms of section 11(2)(b) or (c) available to any other national departments that have responsibilities relating to the grant.
submit, as part of the report required in section 40(4)(c) of the Public Finance Management Act, reports to the relevant provincial treasury on spending and performance against programmes; and submit a quarterly performance report within 30 days after the end of each quarter to the relevant provincial treasury and the National Treasury.
The receiving officer must report against programmes funded or partially funded by a Schedule 4 allocation against the relevant framework in the annual ï¬nancial statements and annual report.
The receiving officer of a Schedule 5, 6 or 8 allocation must ensure compliance with the requirements of the relevant framework.
submit a ï¬nal report on the stadium construction programme, including all expenditure and a reconciliation of those bank accounts that were used for the stadium construction programme; and attach to the report contemplated in that subsection copies of payment certiï¬cates issued in terms of the construction contract entered into by the municipality which comply with the requirements of the Municipal Finance Management Act.
Duties in respect of annual ï¬nancial statements and annual reports for 2010/11 13.
indicate the funds, if any, utilised for the administration of the allocation by 15 the receiving officer.
indicate any non-compliance with this Act or the relevant framework, and the steps taken to deal with such non-compliance.
certify that all transfers in terms of this Act to the province were deposited into the primary bank account of the province or, where appropriate, into the 35 corporation for public deposits account of a province.
contain such other information as the National Treasury may determine.
The 2010/11 ï¬nancial statements and annual report of a municipality must be prepared in accordance with the Municipal Finance Management Act.
the indicative allocations for provinces and municipalities, along with their initial threshold and performance targets, in respect of Schedule 8 allocations; and the framework for each Schedule 4, 5, 6, 7 or 8 allocation.
any revised allocations in respect of Schedule 7 allocations; and any revised indicative allocations, performance and threshold targets for the Expanded Public Works Programme Incentive Grant.
An amendment, revision, virement or re-allocation takes effect on publication thereof in the Gazette.
Despite anything to the contrary contained in any law, an allocation referred to in Schedule 4, 5, 6, 7 or 8 may only be utilised for the purpose stipulated in the Schedule concerned and in accordance with the framework published in terms of section 14.
Department of Water Affairs for the implementation of Schedule 7 allocations, may receive funds for the provision of a municipal service or municipal function on behalf of a municipality from a national or provincial organ of state except via the municipality responsible for that service or function, unless the National Treasury approves otherwise in respect of municipalities it deems to have low capacity.
A receiving officer must request the National Treasury to amend the payment schedule referred to in subsection (4), in accordance with the procedure set out in section 22, in instances where a transfer to an accredited municipality has been withheld or stopped in terms of section 16 or 17.
The Health Professions Training and Development Grant and the National Tertiary Services Grant may not be withheld in terms of this section.
written notice of the intention to withhold the allocation; and an opportunity to submit written representations, within those seven days or that shorter period, as to why the allocation should not be withheld; and inform the relevant provincial treasury and the National Treasury.
The transferring national officer must again comply with subsection (3) when the National Treasury issues an instruction or approves a request in terms of paragraph (a).
In respect of the Human Settlements Development Grant, a receiving officer may, in consultation with the transferring national officer, the relevant provincial treasury and the National Treasury, withhold a transfer to an accredited municipality, if the conditions set out in subsection (1) exist.
A receiving officer, prior to withholding a transfer to an accredited municipality, must comply with the notice requirements stipulated in subsections (3) and (4).
A receiving officer may request the transferring national officer to seek the approval of the National Treasury that a transfer to an accredited municipality be withheld for a period longer than 30 days, in terms of subsection (5).
the provisions of this Act; or a condition to which the allocation, as provided for in the relevant framework, is subject; or if the National Treasury anticipates that a province or municipality will substantially under-spend on that programme or allocation in the ï¬nancial year.
(a) The National Treasury may, when it stops a Schedule 4, 5 or 6 allocation in terms of section 17, after consultation with the transferring national officer and the relevant provincial treasury, determine that a portion of the allocation that will not be spent be re-allocated, as the same type of grant allocation as it was allocated originally, to one or more provinces or municipalities, on condition that the allocation will be spent in the ï¬nancial year or the next ï¬nancial year.
The re-allocation of a portion of an allocation or the full allocation on condition that the allocation will be spent in the next ï¬nancial year, in terms of paragraph (a), must be deemed to be a roll-over approved by the National Treasury in terms of section 20(2)(a), and the roll-over process set out in Treasury Regulation 6.4.2 would not need to be followed.
An allocation that is converted in terms of this section must be paid to or expended on behalf of the same municipality to which the allocation was originally made.
A conversion referred to in subsection (1) takes effect on the date of publication referred to in section 14(2)(c).
The National Treasury must inform the transferring national officer and each affected receiving municipality of a conversion.
in the case of a province, against future conditional grant allocations to that province; and in the case of a municipality, against future equitable share or conditional grant allocations to that municipality.
A notice contemplated in subsection (5) must include the intended amount to be set-off against allocations, and the reasons for setting-off the amounts.
Despite anything else contained within this section, the retention of funds which should revert to the National Revenue Fund in terms of subsections (1) and (3), and which have not been approved by the National Treasury to be retained in terms of subsection (2), constitutes ï¬nancial misconduct in terms of section 34.
Any advances in terms of paragraph (c) must be set-off against transfers to the province which would otherwise become due in terms of that payment schedule.
Despite paragraph (a), the National Treasury, after consultation with the accounting officer of the national department responsible for local government, may, for cash management purposes in the municipality or when an intervention in terms of section 139 of the Constitution or section 137, 139 or 150 of the Municipal Finance Management Act is taking place, on such conditions as it may determine, approve a request or direct that the equitable share or a portion of it which has not yet fallen due for transfer in accordance with the payment schedule, be advanced to a municipality.
Any advances in terms of paragraph (b) must be set-off against transfers to the municipality which would otherwise become due in terms of the applicable payment schedule.
The National Treasury must approve the payment schedules for a Schedule 4, 5, 6 or 8 allocation transferred to a province or municipality.
The transferring national officer of a Schedule 4, 5, 6 or 8 allocation must submit a payment schedule to the National Treasury for approval before 14 April 2010.
Subject to subsection (2), a transferring national officer of a Schedule 4, 5 or 6 allocation must, within seven days of the withholding or stopping of an allocation in terms of section 16 or 17, amend a payment schedule as a result of the withholding or stopping of an allocation in terms of this Act and submit the amended payment schedule to the National Treasury, prior to any further transfers being made.
a re-allocation referred to in section 18 or in respect of the Expanded Public Works Programme Incentive Grant; or a revised indicative allocation in respect of a Schedule 7 or 8 grant, which is not listed in the Schedules referred to in sections 7 and 8, may only be made in terms of section 6(3).
The National Treasury must publish the allocations and frameworks for such allocations in the Gazette, prior to the transfer of any funds to a province or municipality.
Public Finance Management Act and subject to conditions, make an allocation to a municipality from the Provincial Revenue Fund.
The relevant treasury must publish any allocation and the conditions subject to which the allocations were made, if any, in the Gazette.
Management Act before such an adjustments budget is passed.
must be included either in the next national adjustments budget or in other appropriation legislation tabled in the National Assembly for the ï¬nancial year in which the expenditure is authorised.
An approval granted by the Minister in respect of money to be appropriated for expenditure already announced by the Minister during the tabling of the annual budget, 25 may be made subject to conditions.
The application of this section may be regulated by regulation or treasury instruction.
Grant to Provinces must, by a date determined by the provincial treasury, submit detailed infrastructure plans in a format determined by the National Treasury, to the provincial treasury, and the provincial treasury must submit the infrastructure plans to the National Treasury by 31 August 2010.
Column B of Schedule 4.
ensure that the infrastructure budgets of the receiving departments make adequate provision for operations and maintenance associated with newly constructed or upgraded infrastructure.
submit to the transferring national officer- (aa) the provisional allocations referred to in subparagraph (i); and (bb) the prioritised projects contemplated in subparagraph (i) listed per municipality to be funded from the allocations for the next ï¬nancial year and the 2012/13 ï¬nancial year.
Any proposed amendment or adjustment of the allocations published in terms of section 29(3)(b) must be agreed with the relevant category B municipality, the transferring national officer and the National Treasury, prior to the submission of the allocations referred to in paragraph (a)(ii).
The ï¬nal allocations based on the provisional allocations referred to in paragraph (a)(i) and (ii) must be submitted to the National Treasury by 7 December 2010.
Expenditure prior to commencement of Division of Revenue Act, 2011 27. Despite sections 3(2), 7(2) and 8(2), if the annual Division of Revenue Act for the next ï¬nancial year has not commenced before or on 1 April 2011, the National Treasury may determine that an amount not exceeding 45 per cent of the total amount of each allocation made in terms of sections 3(1), 7(1) and 8(1) be transferred to the relevant province or municipality as a direct charge against the National Revenue Fund.
(a) In addition to the requirements of the Municipal Finance Management Act, the accounting officer of a category C municipality must, no later than 14 April 2010, submit to the National Treasury and all category B municipalities within that municipality's area of jurisdiction, the budget, as tabled in accordance with section 16 of the Municipal Finance Management Act, for the 2010/11 municipal ï¬nancial year, and the two following municipal ï¬nancial years.
A category C municipality and a category B municipality must, before the commencement of a municipal ï¬nancial year, agree to a payment schedule in respect of the allocations referred to in subsection (1)(b) to be transferred to the category B municipality in that ï¬nancial year, and the category C municipality must submit the payment schedule to the National Treasury.
In addition to the requirements of the Municipal Finance Management Act, the disposal by a municipality of a stadium that was built or upgraded with funding allocated in terms of the FIFA World Cup Stadiums Development Grant is subject to the approval of the transferring national officer for the FIFA World Cup Stadiums Development Grant and the National Treasury.
In respect of the Human Settlements Development Grant, the ï¬nancial and non-ï¬nancial reporting that is required to be submitted by the accredited municipality in terms of the grant framework must relate to the requirements speciï¬ed in the grant framework.
An accredited municipality must submit the required monthly ï¬nancial and quarterly performance reports to the receiving officer, the transferring national officer and the National Treasury.
The provincial treasury must reï¬ect Schedule 5 allocations separately in the province's appropriation Bill or a schedule to its appropriation Bill.
The allocations and budgets referred to in paragraph (a) must be deemed to be ï¬nal if the legislature passes the appropriation Bill without any amendments.
In the event that the legislature amends the appropriation Bill, the accounting officer of the provincial treasury must publish amended allocations and budgets in the Gazette within 14 days of the legislature passing the appropriation Bill, which allocations must align to the appropriation Bill as passed by the legislature, and which must be deemed to be ï¬nal.
Despite anything to the contrary contained in any law, a provincial treasury may, in accordance with a framework determined by the National Treasury, amend the allocations referred to in subsection (2) or make additional allocations to municipalities that were not published in terms of subsection (1) or (2).
The amended allocations and allocations referred to in paragraph (a) must be included in the province's budget documents that are submitted with an adjustment appropriation Bill to its legislature.
The provisions of subsection (2), with the necessary changes, apply in respect of allocations referred to in paragraph (b).
Where a function for which a province receives a Schedule 5 allocation is assigned to a municipality during a ï¬nancial year and the province has not appropriated funds to that municipality for the performance of that function, the province must transfer the allocation to the municipality in terms of section 226(3) of the Constitution as a direct charge against that province's Revenue Fund and must inform the National Treasury of the transfer.
actual transfers made by the province to municipalities, and actual expenditure by municipalities on such allocations.
that a payment schedule is agreed between each provincial department and receiving institution referred to in subsection (2)(a); and that transfers are made in accordance therewith; and submit the payment schedules to the National Treasury within 14 days of the commencement of the ï¬nancial year.
The accounting officer of a provincial department or municipality that receives funds from a public entity as a grant, sponsorship or donation must disclose in its ï¬nancial statements the purpose and amount of each such grant, sponsorship or donation received.
in respect of the Gautrain Rapid Rail Link Grant, the dedicated banking account conï¬guration established for the transfer of the Gautrain Rapid Rail Link Grant in accordance with the directive issued by the National Treasury under section 10(2)(a) of the Division of Revenue Act, 2006 (Act No. 2 of 2006).
Any transfer made or spending of an allocation in contravention of this Act or a framework published in terms of this Act, constitutes irregular expenditure in terms of the Public Finance Management Act and the Municipal Finance Management Act.
Despite anything to the contrary contained in any law, any serious or persistent non-compliance with a provision of this Act or a framework published in terms of this Act, and in particular, any non-compliance with section 26, constitutes ï¬nancial misconduct.
Section 84 of the Public Finance Management Act and section 171(4) of the Municipal Finance Management Act apply in respect of ï¬nancial misconduct contemplated subsection (1).
The National Treasury may, on written application by a transferring national officer, province, or municipality, exempt such officer, province, or municipality in writing from complying with a provision of this Act.
anything which must or may be prescribed in terms of this Act; and any ancillary or incidental administrative or procedural matter that it is necessary to prescribe for the proper implementation or administration of this Act.
Subject to subsection (2), the Division of Revenue Act, 2009 (Act No. 12 of 2009), with the exception of sections 33 and 47, is hereby repealed.
(Vote 15) Development Grant associated with training of health provinces Free State recruitment of medical specialists in under KwaZulu-Natal served provinces; and support and Limpopo strengthen undergraduate and postgraduate Mpumalanga teaching and training processes in health Northern Cape facilities.
National Tertiary Services Grant To compensate tertiary facilities for the Nationally assigned function to Eastern Cape additional costs associated with the provinces Free State rendering of tertiary services provision and Gauteng spill over effects.
(Vote 16) Training function to the national Department of Higher Education and Training.
(Vote 9) of new and existing infrastructure in education, roads, health and agriculture; to enhance the application of labour intensive methods in order to maximise job creation and skills development as encapsulated in the EPWP guidelines; and to enhance capacity to deliver infrastructure.
(Vote 36) public transport services provided by provinces Free State provincial departments of transport.
(Vote 3) Cooperative Governance and Traditional Affairs Municipal Infrastructure Grant (Cities) Supplements the capital revenues of selected large urban municipalities in order to support their infrastructure investment programmes.
Works programme; and improve food Limpopo security within previously disadvantaged Mpumalanga communities.
(Vote 13) library infrastructure, facilities and services Free State disadvantaged communities) through a KwaZulu-Natal recapitalised programme at provincial level Limpopo in support of local government and national Mpumalanga initiatives.
Basic Education (Vote 14) (a) Dinaledi Schools Grant To enhance the quality of maths and science in Dinaledi schools by providing additional resources.
HIV and Aids (Life Skills Education) Grant To provide education and training for school management teams, learners, educators and other school support staff to develop, implement and manage life skills education in line with the National Strategic Plan on HIV and Aids, policies on HIV and Aids, National Curriculum Statement, drug and substance abuse and gender equity policies.
National School Nutrition Programme Grant To provide nutritious meals to targeted learners.
Basic Education (Vote 14) (d) Technical Secondary Schools Recapitalisation Grant To recapitalise technical schools to improve the capacity to contribute to skills development and training.
Health (Vote 15) (a) Comprehensive HIV and Aids Grant To enable the health sector to develop an effective response to HIV and Aids; to support the implementation of the National Operational Plan for comprehensive HIV and Aids treatment and care; and to subsidise in-part funding for the antiretroviral treatment programme.
Forensic Pathology Services Grant To continue the development and provision Conditional allocation of adequate mortuary services in all provinces.
Hospital Revitalisation Grant To provide funding to enable provinces to plan, manage, modernise, rationalise and transform the infrastructure, health technology, monitoring and evaluation of hospitals; and to transform hospital management and improve quality of care in line with national policy objectives.
Housing Disaster Relief Grant To provide emergency relief in support of reconstruction work to housing and related infrastructure damaged by storms in KwaZulu-Natal.
Human Settlements Development Grant To provide funding for the creation of sustainable human settlements.
Public Works (Vote 6) (a) Devolution of Property Rate Funds Grant To facilitate the transfer of property rates expenditure responsibility to provinces; and to enable provincial accounting officers to be fully accountable for their expenditure and payment of provincial property rates.
Expanded Public Works Programme Grant for the Social Sector To subsidise non-profit organisations in home and community based care via the provincial departments of Health and Social Development, to provide stipends to previously unpaid volunteers to maximise job creation and skills development in line with the Expanded Public Works Programme guidelines.
(Vote 19) Sport and Recreation South Africa Mass Sport and Recreation Participation Programme Grant To promote mass participation within communities and schools through selected sport and recreation activities, empowerment of communities and schools in conjunction with stakeholders and development of communities through sport.
Transport (Vote 36) (a) Gautrain Rapid Rail Link Grant To provide for national government funding contribution to the Gauteng Provincial Government for the construction of a fully integrated Gautrain Rapid Rail network.
Overload Control Grant To successfully implement the National Overload Control Strategy and ensure that overloading practices are significantly reduced.
To assist municipalities in building in-house capacity to perform their functions and stabilise institutional and governance systems.
To promote and support reforms in financial management by building capacity in municipalities to implement the Municipal Finance Management Act.
To subsidise water schemes owned and/or operated by the department or by other agencies on behalf of the department and transfer these schemes to local government.
To assist host cities with the operational response associated with the hosting of the 2010 FIFA World Cup competition.
To provide specific capital finance for basic municipal infrastructure backlogs for poor households, to micro enterprises and social institutions servicing poor communities.
To implement the Integrated National Electrification Programme (INEP) by providing capital subsidies to municipalities to address the electrification backlog of permanently occupied residential dwellings, the installation of bulk infrastructure and rehabilitation and refurbishment of electricity infrastructure in order to improve quality of supply. To implement the Electricity Demand Side Management (EDSM) programme by providing capital subsidies to licensed distributors to address EDSM in residential dwellings, communities and commercial buildings in order to mitigate the risk of load shedding and supply interruptions. To support neighbourhood development projects that provide community infrastructure and create the platform for other public and private sector development, towards improving the quality of life of residents in targeted underserved neighbourhoods (townships generally). To provide for accelerated planning, establishment, construction and improvement of new and existing public transport and non-motorised transport infrastructure and systems.
To strengthen the rural transport services by improving accessibility to essential services.
To provide capital finance for basic water supply in municipal infrastructure for affected households, micro enterprises and social institutions.
To fund the design and construction of new designated stadiums or the design and upgrading of designated existing stadiums and supporting bulk services infrastructure in the World Cup host cities.
(Vote 9) National Treasury Neighbourhood Development Partnership Grant To support neighbourhood development projects that provide community infrastructure and create the platform for other public and private sector development, towards improving the quality of life of residents in targeted underserved neighbourhoods (townships generally).
Energy (Vote 28) (a) Integrated National Electrification Programme (Eskom) Grant To implement the Integrated National Electrification Programme (INEP) by providing capital subsidies to Eskom to address the electrification backlog of permanently occupied dwellings, the installation of bulk infrastructure and rehabilitation of electrification infrastructure.
Electricity Demand Side Management (Eskom) Grant To implement the Electricity Demand Side Management (EDSM) programme by providing capital subsidies to Eskom to address the EDSM in dwellings, communities and commercial buildings in order to mitigate the risk of load shedding and supply interruptions.
Water Affairs (Vote 37) (a) Water Services Operating Subsidy Grant To subsidise water schemes owned and/or operated by the department or by other agencies on behalf of the department and transfer these schemes to local government.
Regional Bulk Infrastructure Grant To develop regional bulk infrastructure for water supply to supplement water treatment works at resource development and link such water resource development with the local bulk and local distribution networks on a regional basis cutting across several local municipal boundaries. In the case of sanitation, to supplement regional bulk collection as well as regional waste water treatment works.
(Vote 30) Human Settlements Rural Households Infrastructure Grant To provide specific capital finance for the eradication of rural sanitation backlogs targeted at existing households without access to sanitation and water.
Public Works (Vote 6) Expanded Public Works Programme Incentive Grant to Provinces for the Infrastructure Sector To incentivise provinces to increase labour intensive employment through programmes that maximise job creation and skills development in line with the Expanded Public Works Programme guidelines.
Public Works Expanded Public Works Programme To incentivise municipalities to increase labour intensive employment through infrastructure (Vote 6)Incentive Grant for Municipalities programmes that maximise job creation and skills development in line with the Expanded Public Works Programme guidelines.