Application Overview

The fund administration application controls the annual allocation of MIG funding as well as monthly disbursements to municipalities after taking account of previous transfers, actual expenditure and projected expenditure for the next monthly cycle.

In addition, the fund administration application provides the means for all three spheres of government to comply with the MIG-specific provisions of the Division of Revenue Act (DORA).

The same controls apply to funding allocated to infrastructure projects and management fees.  The main features of the Fund Administration Application were derived directly from the DORA as explained in the following four paragraphs.

Allocations

This is where the gazetted annual allocations for infrastructure and management fee are recorded.  It is recorded once and perhaps revised once or twice by the dplg Senior Manager Finance.

 

Throughout the application, funds allocated to funding municipalities (Devolution option 1 and 2) reflect against the name of the municipality while funds allocated to a District Municipality reflect under DM (Own projects).  Funds allocated to non-funding municipalities (Devolution option 3) are also reflected against the name of the municipality but in the same grouping as the DM, indicating that the funds are actually managed by the DM.

Payment schedules

The payment schedule specifies the monthly amount to be transferred from dplg to funding municipalities.  There are separate schedules for infrastructure funding and management fees.  Please refer to the Tutorial for an example of capturing and submitting a payment schedule for a municipality.

In the case of infrastructure funding, the schedule is calculated as the sum of committed and uncommitted funding.  The committed funding is obtained from the cash flow projections of registered projects.  There are two ways of updating cash flows and both of these reside in the Project Life Cycle application:

1.   Capturing and recommending MIG 4, 5, 6 and 8 forms.

2.   The cash flow Tab in Project overview

Transfers

This is where dplg records the BAS Reference and Action Date for transfers actually made.  Unless an intervention is required, the amount transferred will be the exact amount provided for in the payment schedule.

Expenditure

This is where the actual expenditure incurred by a LM or DM is declared.  Once again there are separate processes for declaring infrastructure and management fee related spending.

In the case of infrastructure spending, the expenses are actually captured in the Project Life Cycle application while capturing the "Payment requested" section of MIG 6, 8 and 10 forms.  In these sections, the payment requested is built up from tax invoices submitted by consultants, contractors and suppliers after retention has been dealt with.

All that is added in the expenditure module is to declare that the invoices have actually been paid and this is done by recording the payment stub number obtained from the municipality's financial system against each invoice.