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- Is amended by Municipal Fiscal Powers and Functions Act, 2007
- Is commenced by Local Government: Municipal Finance Management Act, 2003: Commencement
Local Government: Municipal Finance Management Act, 2003
Act 56 of 2003
- Published in Government Gazette 26019 on 13 February 2004
- Assented to on 9 February 2004
- There are multiple commencements
- [This is the version of this document from 7 September 2007.]
Provisions | Status |
---|---|
Chapter 1 (section 1–4. Amendments to Act); Chapter 2, section 5(1)–(7), section 6; Chapter 3, Part 1, section 7–8, section 10–12; Part 2 (section 13. Cash management and investments–14); Chapter 4, section 15–27, section 29–33; Chapter 5, section 34(1)–(4), section 35–37, section 43–44; Chapter 6, section 45(1)–(3), (4)(b), (5)–(6), section 46–51; Chapter 7 (section 52–59); Chapter 8, Part 1, section 60–61; subpart, section 62(1)(a)–(e), (1)(f)(i)–(iii), (2), section 63–70; subpart, section 72, section 74–76; Part 2 (section 77–79); Chapter 9, section 80–82; Chapter 10, Part 1 (section 84); Part 2, section 85–90, section 92; Part 3 (section 93–100); Part 4 (section 101–104); Part 5, section 105–106; Part 6 (section 108–109); Chapter 11, Part 1, section 117–118; Part 2 (in part); Chapter 12, section 121–122, section 124–125; Chapter 14 (section 163–170); Chapter 15 (section 171–175); Chapter 16, section 176–178, section 180 | commenced on 1 July 2004 by Government Notice 772 of 2004. |
Chapter 8, Part 1, subpart, section 62(1)(f)(iv); subpart, section 71; Chapter 11, Part 1, section 110–116; Part 2, section 120 |
commenced on 1 December 2004
by Government Notice 772 of 2004.
Note: Date of commencement of sections 62(1)(f)(iv), 71, 110-116 and 120 |
Chapter 3, Part 1, section 9; Chapter 5, section 38–42 |
commenced on 1 April 2005
by Government Notice 772 of 2004.
Note: Date of commencement of sections 9 and 38-42 |
Chapter 2, section 5(3)–(4), (8); Chapter 4, section 28; Chapter 5, section 34(3); Chapter 8, Part 1, subpart, section 73; Chapter 10, Part 2, section 91; Chapter 12, section 123, section 126–134; Chapter 13 (section 135–162); Chapter 16, section 179 |
commenced on 1 July 2005
by Government Notice 772 of 2004.
Note: Date of commencement of sections 5(3), (4) and (8); 28; 34(3); 73; 91; 123; 126-134; 135-162; and 179 |
Chapter 9, section 83; Chapter 10, Part 5, section 107; Chapter 11, Part 1, section 119 |
commenced on 1 July 2006
by Government Notice 772 of 2004.
Note: Date of commencement of sections 83, 107 and 119 |
Chapter 5, section 43(4) | commenced on 7 September 2007. |
Chapter 6, section 45(4)(a) |
commenced on 1 July 2008
by Government Notice 772 of 2004.
Note: Date of commencement of section 45(4)(a) |
- [Amended by Municipal Fiscal Powers and Functions Act, 2007 (Act 12 of 2007) on 7 September 2007]
Chapter 1
Interpretation, object, application and amendment of Act
1. Definitions
2. Object of Act
The object of this Act is to secure sound and sustainable management of the fiscal and financial affairs of municipalities and municipal entities by establishing norms and standards and other requirements for—3. Institutions to which Act applies
4. Amendments to Act
Draft national legislation directly or indirectly amending this Act, or providing for the enactment of subordinate legislation that may conflict with this Act, may be introduced in Parliament only after the Minister and the Financial and Fiscal Commission have been consulted in writing on the contents of the draft legislation, and have responded in writing.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
The accounting officer of a municipality must submit to the relevant provincial treasury and the Auditor-General, in writing—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
A municipality may, except where otherwise provided in this Act, incur expenditure only—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
Immediately after an annual budget is tabled in a municipal council, the accounting officer of the municipality must—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
The appropriation of funds in an annual or adjustments budget lapses to the extent that those funds are unspent at the end of the financial year to which the budget relates, except in the case of an appropriation for expenditure made for a period longer than that financial year in terms of section 16(3).31. Shifting of funds between multi-year appropriations
When funds for a capital programme are appropriated in terms of section 16( 3) for more than one financial year, expenditure for that programme during a financial year may exceed the amount of that year’s appropriation for that programme, provided that—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
National and provincial departments and public entities must—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
If the transfer of funds to a municipality has been stopped in terms of section 38(1)(b) for the rest of the relevant financial year, the accounting officer of the national or provincial department responsible for the transfer must reflect such stopping of funds, together with reasons, in the annual financial statements of the department.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
A municipality may incur debt only if—48. Security
49. Disclosure
50. Municipal guarantees
A municipality may not issue any guarantee for any commitment or debt of any organ of state or person, except on the following conditions:51. National and provincial guarantees
Neither the national nor a provincial government may guarantee the debt of a municipality or municipal entity except to the extent that Chapter 8 of the Public Finance Management Act provides for such guarantees.Chapter 7
Responsibilities of mayors
52. General responsibilities
The mayor of a municipality—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
If a municipality has not approved an annual budget by the first day of the budget year or if the municipality encounters a serious financial problem referred to in section 136, the mayor of the municipality—56. Exercise of rights and powers over municipal entities
57. Municipalities which do not have mayors
58. Municipalities with executive committees
The powers and functions assigned by this Act to a mayor must, in the case of a municipality which has an executive committee referred to in section 43 of the Municipal Structures Act, be exercised by the mayor in consultation with the executive committee.59. Delegations of mayoral powers and duties
Chapter 8
Responsibilities of municipal officials
Part 1 – Accounting officers
60. Municipal managers to be accounting officers
The municipal manager of a municipality is the accounting officer of the municipality for the purposes of this Act, and, as accounting officer, must—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
The accounting officer of a municipality must, in a format and for periods as may be prescribed, report to the council on all expenditure incurred by the municipality on staff salaries, wages, allowances and benefits, and in a manner that discloses such expenditure per type of expenditure, namely—67. Funds transferred to organisations and bodies outside government
68. Budget preparation
The accounting officer of a municipality must—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
The accounting officer must inform the provincial treasury, in writing, of—74. General reporting obligation
75. Information to be placed on websites of municipalities
76. Protection of accounting officer
Any action taken by a political structure or office-bearer of a municipality against the accounting officer of the municipality solely because of that accounting officer's compliance with a provision of this Act, is an unfair labour practice for the purposes of the Labour Relations Act, 1995 (Act No. 66 of 1995).Part 2 – Financial administration
77. Top management of municipalities
78. Senior managers and other officials of municipalities
79. Delegations
Chapter 9
Municipal budget and treasury offices
80. Establishment
81. Role of chief financial officer
82. Delegations
83. Competency levels of professional financial officials
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
The parent municipality of a municipal entity must—90. Disposal of capital assets
91. Financial year
The financial year of a municipal entity must be the same as that of municipalities.92. Audit
The Auditor-General must audit and report on the accounts, financial statements and financial management of each municipal entity.Part 3 – Accounting officers
93. Chief executive officer to be accounting officer
The chief executive officer of a municipal entity appointed in terms of section 93J of the Municipal Systems Act is the accounting officer of the entity.94. Fiduciary duties of accounting officers
95. General financial management functions of accounting officers
The accounting officer of a municipal entity is responsible for managing the financial administration of the entity, and must for this purpose take all reasonable steps to ensure—96. Asset and liability management
97. Revenue management
The accounting officer of a municipal entity must take all reasonable steps to ensure—98. Monthly reconciliation of revenue and accounts
The accounting officer of a municipal entity must take all reasonable steps to ensure that—99. Expenditure management
100. Budget implementation
The accounting officer of a municipal entity is responsible for implementing the entity’s budget, including taking effective and appropriate steps to ensure that—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
The accounting officer of a municipal entity must promptly report to the speaker of the council of the entity’s parent municipality any interference by a councillor outside that councillor’s assigned duties, in—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
The accounting officer, senior managers, any chief financial officer and all other financial officials of a municipal entity must meet the prescribed financial management competency levels.Part 6 – General
108. Borrowing of money
109. Financial problems in municipal entities
If a municipal entity experiences serious or persistent financial problems and the board of directors of the entity fails to act effectively, the parent municipality must either—Chapter 11
Goods and services
Part 1 – Supply chain management
110. Application of this Part
111. Supply chain management policy
Each municipality and each municipal entity must have and implement a supply chain management policy which gives effect to the provisions of this Part.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
No councillor of any municipality may be a member of a municipal bid committee or any other committee evaluating or approving tenders, quotations, contracts or other bids, nor attend any such meeting as an observer.118. Interference
No person may—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
127. Submission and tabling of annual reports
128. Compliance to be monitored
The accounting officer of a parent municipality must—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
The Cabinet member responsible for local government must, as part of the report referred to in section 48 of the Municipal Systems Act, annually report to Parliament on actions taken by MECs for local government to address issues raised by the Auditor-General in audit reports on financial statements of municipalities and municipal entities.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
When determining for the purposes of section 137 the seriousness of a financial problem, all relevant facts must be considered, and the following factors, singly or in combination, may indicate a serious financial problem: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
If a provincial executive intervenes in a municipality in terms of section 139 of the Constitution, the provincial executive and its representatives have access to such information, records and documents of the municipality or of any municipal entity under the sole or shared control of the municipality as may be necessary for the intervention, including for identifying or resolving the financial problem of the municipality.150. National interventions
Part 3 – Debt relief and restructuring
151. Legal rights
Except as expressly provided for in this Part, nothing in this Chapter limits or affects —152. Application for stay of legal proceedings
153. Application for extraordinary relief
154. Suspension of financial obligations
Before issuing an order in terms of section 153(1)(b) for the suspension of a municipality's financial obligations to creditors, the court must be satisfied that—155. Termination of financial obligations and settlement of claims
156. Matters to be prescribed
The Minister, acting with the concurrence of the Cabinet member responsible for local government, must by regulation in terms of section 168—Part 4 – Municipal Financial Recovery Service
157. Establishment
158. Functions and powers
The Municipal Financial Recovery Service—159. Appointment of Head
160. Responsibilities of Head
161. Staff
The staff of the Municipal Financial Recovery Service consists of—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
A person is liable on conviction of an offence in terms of section 173 to imprisonment for a period not exceeding five years or to an appropriate fine determined in terms of applicable legislation.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
History of this document
01 July 2008
Note: Date of commencement of section 45(4)(a)
07 September 2007 this version
01 July 2006
Note: Date of commencement of sections 83, 107 and 119
01 July 2005
Note: Date of commencement of sections 5(3), (4) and (8); 28; 34(3); 73; 91; 123; 126-134; 135-162; and 179
01 April 2005
Note: Date of commencement of sections 9 and 38-42
01 December 2004
Note: Date of commencement of sections 62(1)(f)(iv), 71, 110-116 and 120
01 July 2004
13 February 2004
09 February 2004
Cited documents 12
Act
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Citizenship and Immigration
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Education
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Environment, Climate and Wildlife
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Health and Food Safety
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Human Rights
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International Law
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Labour and Employment
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Human Rights
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Infrastructure and Transportation
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Labour and Employment
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Public administration
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Environment, Climate and Wildlife
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Infrastructure and Transportation
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Public administration
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Business, Trade and Industry
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Dispute Resolution and Mediation
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Environment, Climate and Wildlife
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Finance and Money
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Human Rights
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International Law
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Labour and Employment
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Finance and Money
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Finance and Money
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Business, Trade and Industry
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Human Rights
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Finance and Money
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Repealed
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Public administration
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Proclamation
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Education
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Finance and Money
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Labour and Employment
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Documents citing this one 1850
Gazette
1592Judgment
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Legality review — unreasonable delay — overlooking delay — section 172 of the Constitution — Gijima
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By-law
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Finance and Money
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Infrastructure and Transportation
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Finance and Money
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Finance and Money
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Finance and Money
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Act
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Human Rights
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Infrastructure and Transportation
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Labour and Employment
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Public administration
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Finance and Money
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Infrastructure and Transportation
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Business, Trade and Industry
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Business, Trade and Industry
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Energy and Natural Resources
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Environment, Climate and Wildlife
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Finance and Money
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Energy and Natural Resources
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Environment, Climate and Wildlife
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Dispute Resolution and Mediation
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Finance and Money
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Human Rights
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Business, Trade and Industry
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Uncommenced
Business, Trade and Industry
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Government Notice
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Repealed
Health and Food Safety
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Health and Food Safety
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Health and Food Safety
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Environment, Climate and Wildlife
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Business, Trade and Industry
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Repealed
Environment, Climate and Wildlife
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Provincial Notice
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Finance and Money
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Finance and Money
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General Notice
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Subsidiary legislation
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Business, Trade and Industry
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Government Notice 503 of 2020 |
Environment, Climate and Wildlife
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Government Notice 429 of 2020 |