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NATIONAL LEGISLATION OVERVIEWS
NATIONAL LEGISLATION OVERVIEWS
Local Government Municipal
Finance Management Act, No. 56 of 2003
Long title
To secure sound and sustainable management of the financial affairs of municipalities and other institutions in the local sphere of government; to establish treasury norms and standards for the local sphere of government; and to provide for matters connected therewith.
Table of contents
Legislation Text Access Point
Long title
To secure sound and sustainable management of the financial affairs of municipalities and other institutions in the local sphere of government; to establish treasury norms and standards for the local sphere of government; and to provide for matters connected therewith.
Table of contents
| SECTION | TITLE |
| ARRANGEMENT OF SECTIONS | |
| CHAPTER 1. INTERPRETATION, OBJECT, APPLICATION AND AMENDMENT OF ACT | |
| 1. | Definitions |
| 2. | Object of Act |
| 3. | Institutions to which Act applies |
| 4. | Amendments to Act |
| CHAPTER 2. SUPERVISION OVER LOCAL GOVERNMENT FINANCE MANAGEMENT | |
| 5. | General functions of National Treasury and provincial treasuries |
| 6. | Delegations by National Treasury |
| CHAPTER 3. MUNICIPAL REVENUE | |
| Part 1. Municipal bank accounts | |
| 7. | Opening of bank accounts |
| 8. | Primary bank account |
| 9. | Bank account details to be submitted to provincial treasuries and Auditor-General |
| 10. | Control of municipal bank accounts |
| 11. | Withdrawals from municipal bank accounts |
| 12. | Relief, charitable, trust or other funds |
| Part 2. Cash, investment and asset management | |
| 13. | Cash management and investments |
| 14. | Disposal of capital assets |
| CHAPTER 4. MUNICIPAL BUDGETS | |
| 15. | Appropriation of funds for expenditure |
| 16. | Annual budgets |
| 17. | Contents of annual budgets and supporting documents |
| 18. | Funding of expenditure |
| 19. | Capital projects |
| 20. | Matters to be prescribed |
| 21. | Budget preparation process |
| 22. | Publication of annual budgets |
| 23. | Consultations on tabled budgets |
| 24. | Approval of annual budgets |
| 25. | Failure to approve budget before start of budget year |
| 26. | Consequences of failure to approve budget before start of budget year |
| 27. | Non-compliance with provisions of this Chapter |
| 28. | Municipal adjustments budgets |
| 29. | Unforeseen and unavoidable expenditure |
| 30. | Unspent funds |
| 31. | Shifting of funds between multi-year appropriations |
| 32. | Unauthorised, irregular or fruitless and wasteful expenditure |
| 33. | Contracts having future budgetary implications |
| CHAPTER 5. CO-OPERATIVE GOVERNMENT | |
| 34. | Capacity building |
| 35. | Promotion of co-operative government by national and provincial institutions |
| 36. | National and provincial allocations to municipalities |
| 37. | Promotion of co-operative government by municipalities |
| 38. | Stopping of funds to municipalities |
| 39. | Stopping of equitable share allocations to municipalities |
| 40. | Stopping of other allocations to municipalities |
| 41. | Monitoring of prices and payments for bulk resources |
| 42. | Price increases of bulk resources for provision of municipal services |
| 43. | Applicability of tax and tariff capping on municipalities |
| 44. | Disputes between organs of state |
| CHAPTER 6. DEBT | |
| 45. | Short-term debt |
| 46. | Long-term debt |
| 47. | Conditions applying to both short-term and long-term debt |
| 48. | Security |
| 49. | Disclosure |
| 50. | Municipal guarantees |
| 51. | National and provincial guarantees |
| CHAPTER 7. RESPONSIBILITIES OF MAYORS | |
| 52. | General responsibilities |
| 53. | Budget processes and related matters |
| 54. | Budgetary control and early identification of financial problems |
| 55. | Report to provincial executive if conditions for provincial intervention exist |
| 56. | Exercise of rights and powers over municipal entities |
| 57. | Municipalities which do not have mayors |
| 58. | Municipalities with executive committees |
| 59. | Delegations of mayoral powers and duties |
| CHAPTER 8. RESPONSIBILITIES OF MUNICIPAL OFFICIALS | |
| Part 1. Accounting officers | |
| 60. | Municipal managers to be accounting officers |
| 61. | Fiduciary responsibilities of accounting officers |
| Financial Management | |
| 62. | General financial management functions |
| 63. | Asset and liability management |
| 64. | Revenue management |
| 65. | Expenditure management |
| 66. | Expenditure on staff benefits |
| 67. | Funds transferred to organisations and bodies outside government |
| 68. | Budget preparation |
| 69. | Budget implementation |
| 70. | Impending shortfalls, overspending and overdrafts |
| Reports and reportable matters | |
| 71. | Monthly budget statements |
| 72. | Mid-year budget and performance assessment |
| 73. | Reports on failure to adopt or implement budget-related and other policies |
| 74. | General reporting obligation |
| 75. | Information to be placed on websites of municipalities |
| 76. | Protection of accounting officer |
| 77. | Part 2. Financial administration |
| Top management of municipalities | |
| 78. | Senior managers and other officials of municipalities |
| 79. | Delegations |
| CHAPTER 9. MUNICIPAL BUDGET AND TREASURY OFFICES | |
| Establishment | |
| 80. | Role of chief financial officer |
| 81. | Delegations |
| 82. | Competency levels of professional financial officials |
| 83. | CHAPTER 10. MUNICIPAL ENTITIES |
| Part 1. Establishment | |
| 84. | Financial implications for municipalities |
| Part 2. Financial governance | |
| 85. | Bank accounts |
| 86. | Bank account details |
| 87. | Budgets |
| 88. | Mid-year budget and performance assessment |
| 89. | Remuneration packages |
| 90. | Disposal of capital assets |
| 91. | Financial year |
| 92. | Audit |
| Part 3. Accounting officers | |
| 93. | Chief executive officer to be accounting officer |
| 94. | Fiduciary duties of accounting officers |
| 94. | General financial management functions of accounting officers |
| 96. | Asset and liability management |
| 97. | Revenue management |
| 98. | Monthly reconciliation of revenue and accounts |
| 99. | Expenditure management |
| 100. | Budget implementation |
| Part 4. Reports and reportable matters | |
| 101. | Impending under collection, shortfalls, overspending, overdrafts, and non-payment |
| 102. | Irregular or fruitless and wasteful expenditure |
| 103. | Reporting of improper interference by councillors |
| 104. | General reporting obligations |
| Part 5. Other officials of municipal entities | |
| 105. | Duties of other officials |
| 106. | Delegation of powers and duties by accounting officers |
| 107. | Competency levels of professional financial officials |
| Part 6. General | |
| 108. | Borrowing of money |
| 109. | Financial problems in municipal entities |
| CHAPTER 11. GOODS AND SERVICES | |
| Part 1. Supply chain management | |
| 110. | Application of this Part |
| 111. | Supply chain management policy |
| 112. | Supply chain management policy to comply with prescribed framework |
| 113. | Unsolicited bids |
| 114. | Approval of tenders not recommended |
| 115. | Implementation of system |
| 116. | Contracts and contract management |
| 117. | Councillors barred from serving on municipal tender committees |
| 118. | Interference |
| 119. | Competency levels of officials involved in municipal supply chain management |
| Part 2. Public-private partnerships | |
| 120. | Conditions and process for public-private partnerships |
| CHAPTER 12. FINANCIAL REPORTING AND AUDITING | |
| 121. | Preparation and adoption of annual reports |
| 122. | Preparation of financial statements |
| 123. | Disclosures on intergovernmental and other allocations |
| 124. | Disclosures concerning councillors, directors and officials |
| 125. | Other compulsory disclosures |
| 126. | Submission and auditing of annual financial statements |
| 137. | Submission and tabling of annual reports |
| 128. | Compliance to be monitored |
| 129. | Oversight reports on annual reports |
| 130. | Council meetings open to public and certain public officials |
| 131. | Issues raised by Auditor-General in audit reports |
| 132. | Submissions to provincial legislatures |
| 133. | Consequences of non-compliance with certain provisions |
| 134. | Annual report to Parliament |
| CHAPTER 13. RESOLUTION OF FINANCIAL PROBLEMS | |
| Part 1. Identification of financial problems | |
| 135. | Primary responsibility for resolution of financial problems |
| Part 2. Provincial interventions | |
| 136. | Types of provincial interventions |
| 137. | Discretionary provincial interventions |
| 138. | Criteria for determining serious financial problems |
| 139. | Mandatory provincial interventions arising from financial crises |
| 140. | Criteria for determining serious or persistent material breach of financial commitments |
| 141. | Preparation of financial recovery plans |
| 142. | Criteria for financial recovery plans |
| 143. | Approval of financial recovery plans |
| 144. | Amendment of financial recovery plans |
| 145. | Implementation of financial recovery plans in discretionary provincial interventions |
| 146. | Implementation of financial recovery plans in mandatory provincial interventions |
| 147. | Regular review of provincial interventions |
| 148. | Termination of provincial interventions |
| 149. | Access to information, records and documents of municipalities |
| 150. | National interventions |
| Part 3. Debt relief and restructuring | |
| 151. | Legal rights |
| 152. | Application for stay of legal proceedings |
| 153. | Application for extraordinary relief |
| 154. | Suspension of financial obligations |
| 155. | Termination of financial obligations and settlement of claims |
| 156. | Matters to be prescribed |
| Part 4. Municipal Financial Recovery Service | |
| 157. | Establishment |
| 158. | Functions and powers |
| 159. | Appointment of Head |
| 160. | Responsibilities of Head |
| 161. | Staff |
| 162. | Delegations |
| CHAPTER 14. GENERAL TREASURY MATTERS | |
| 163. | Liabilities and risks payable in foreign currencies |
| 164. | Forbidden activities |
| 165. | Internal audit unit |
| 166. | Audit committees |
| 167. | Councillors’ remuneration |
| 168. | Treasury regulations and guidelines |
| 169. | Consultative processes before promulgation of regulations |
| 170. | Departures from treasury regulations or conditions |
| CHAPTER 15. FINANCIAL MISCONDUCT | |
| Part 1. Disciplinary proceedings | |
| 171. | Financial misconduct by municipal officials |
| 172. | Financial misconduct by officials of municipal entities |
| Part 2. Criminal proceedings | |
| 173. | Offences |
| 174. | Penalties |
| Part 3. General | |
| 175. | Regulations on financial misconduct procedures and criminal proceedings |
| CHAPTER 16. MISCELLANEOUS | |
| 176. | Liability of functionaries exercising powers and functions in terms of this Act |
| 177. | Delays and exemptions |
| 178. | Transitional provisions |
| 179. | Repeal and amendment of legislation |
| 180. | Short title and commencement |
| Sch. | SCHEDULE. REPEAL AND AMENDMENT OF LEGISLATION [s179] |
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