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Overview
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Intergovernmental Foundation
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Co-operative governanceSpheres: national, provincial and local
are distinct, independent, and inter-related
Emphasis on co-ordination and support
Chapter 3Chapter 3
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Status of municipalitiesDevelopmental dutiesMunicipal by-lawsMunicipal councilsFunctions: Schedules 4 and 5
Chapter 7Chapter 7
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Equitable shareNational government regulate transparency,
accountability and effective management of economy
Municipal fiscal powers: rates on property, surcharges on fees for services, other taxes as allowed by national government, “no municipality may impose income tax, vat, general sales tax or custom duties”
Chapter 13Chapter 13
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Intergovernmental Foundation
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Forums for intergovernmental fiscal relationsBudget Council (Minister of Finance, National
+ Member of Ex Committee, Province + Finance and Fiscal Commission )
Budget Forum ( Same as above + Organised local government + Minister of Local Government)
IGFR Act of 1997IGFR Act of 1997
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Mechanism
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Equitable shareProvincialLocal
Conditional grantsAgency paymentsWithholding of funds
Division of RevenueDivision of Revenue
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Improving National TransfersImproving National Transfers
Rationalising infrastructure grants ensuring sustainability of investments
Rationalising capacity building grants coordinating approach - initially focusing on financial
managementEncouraging municipal restructuring
improving efficiency and maximising benefits to national economic development
Support and build new structure - municipalities
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Constitutional Institutions
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Established by constitution and Act 99 of 1997
Independent and impartialLocal government has two seats on the
commission
Financial and Fiscal Financial and Fiscal CommissionCommission
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Contents
Currently before Parliament
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Extend principles of good governance, public accountability, transparency through proper process of consultation and understandable regular reporting
Allow managers to manageProvide councillors the financial information
needed to set policies and prioritiesPromote transparency in planning, budgeting,
revenues, expenditure, accounting, fiscal reforms, etc.
Create an environment for an active municipal bond market
Primary Aims of the BillPrimary Aims of the Bill
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Municipal borrowing (5)Financial emergencies (10)Entities and municipalities (8)Budget process (4)Control & usage of revenues (3)Financial reporting (9)Financial responsibilities of officials and financial
misconduct (6 & 12)National and provincial supervision (2 & 11)
Contents of the BillContents of the Bill
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Compliments multi jurisdictional service partnerships / public private partnerships / public public partnerships
Enables restructuring of municipalities through functional budgeting and reporting
Prohibits creation of entities for speculation or to avoid regulatory mechanisms
Promotes transparency and accountability
Municipal EntitiesMunicipal Entities
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Promotes transparency and citizen involvement
Budget must be balancedFacilitates good financial management and
sound decision-making Minimum standards for budget documents and
in-year reportingAdjustments and virements allowed, but
regulated
Budget ProcessBudget Process
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All funds received must be deposited in bank accounts
Any details in cash management including investments addressed in framework prescribed in regulations
(key issues - preservation of capital and minimising risky investments with public funds)
RevenuesRevenues
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Must produce financial statements within two months of year end
Must prepare in accordance with generally recognised accounting practice
Entities created by municipalities must submit audited financial statements to council
Financial ReportingFinancial Reporting
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ResponsibilitiesResponsibilities
Municipal manager = accounting officerAccounting officer assigned financial
management and reporting responsibilitiesAccounting officer liable to fine or conviction for
“wilfully or in a grossly negligent way” failing to comply with certain sections
Member of Council can be sanctioned for influencing manager to contravene a provision of the Act.
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To encourage improved financial management in municipalities
To ensure citizens are informed and councillors have the information necessary to set policy and priorities
To develop an environment for a municipal bond market
To build a strong financial foundation on which municipal services can be improved and extended unserved citizens.
Benefits of this BillBenefits of this Bill
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Infrastructure, Capacity, Restructuring & Transformation
Intergovernmental Transfers
Local Government Transformation ProgrammeLocal Government Transformation Programme
Municipal Finance Mgt. Bill
Municipal Systems ActCapacity Building
Systems
Property Rates BillRSC Levy
Own Source Revenue
Fiscal
Structures Act
Demarcation
Structural
White PaperConstitution
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SIYABONGA
RE A LEBOHA
BAIE DANKIE
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