The Appropriate Use of the Equitable Share Allocation

January 17, 2018 Lungile Penxa No comments exist

WHAT IS AN EQUITABLE SHARE ALLOCATION AND HOW IS IT SUPPOSED TO BE USED? 

By Lungile Penxa

URL link: https://www.pressreader.com/south-africa/grocotts-mail/20171020/281552291096523

The equitable share is a financial allocation in the form of an unconditional grant that enables municipalities to provide basic services to poor households, and to enable municipalities with limited own resources to afford basic administrative and governance capacity and perform core municipal functions. Because the equitable share is not a conditional grant, municipalities can spend the money on other things that are administrative or governance capacity related rather than basic services even though it should be primarily used for improving basic services.

An equitable share is revenue raised nationally to enable municipalities and provinces to provide basic services and perform the functions allocated to it as stipulated in section 227 (1) (a) of the South African Constitution. The amount of equitable share a municipality receives depends on a number of factors such as the size of its low-income population, the cost of basic services and its capacity to raise its own revenue. This allocation is meant to be used for basic services and operational costs, since the equitable share falls under the operating budget of a municipality.

In the 2017/18 financial year, Makana Municipality received operating grants and transfers totalling R98, 8 million, and an allocation catering for the Equitable Share, Financial Management Grant (FMG), Extended Public Works Programme (EPWP) and a subsidy from the Sarah Baartman District municipality.

Leave a Reply

Your email address will not be published. Required fields are marked *

+ 54 = 56