Overview

Intergovernmental Foundation

 Co-operative governance  Spheres: national, provincial and local are distinct, independent, and inter- related  Emphasis on co-ordination and support Chapter 3

 Status of municipalities  Developmental duties  Municipal by-laws  Municipal councils  Functions: Schedules 4 and 5 Chapter 7

 Equitable share  National 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 13

Intergovernmental Foundation

 Forums for intergovernmental fiscal relations  Budget 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 1997

Mechanism

 Equitable share  Provincial  Local  Conditional grants  Agency payments  Withholding of funds Division of Revenue

Improving National Transfers  Rationalising infrastructure grants ensuring sustainability of investments  Rationalising capacity building grants coordinating approach - initially focusing on financial management  Encouraging municipal restructuring improving efficiency and maximising benefits to national economic development  Support and build new structure - municipalities

Constitutional Institutions

 Established by constitution and Act 99 of 1997  Independent and impartial  Local government has two seats on the commission Financial and Fiscal Commission

Contents Currently before Parliament

 Extend principles of good governance, public accountability, transparency through proper process of consultation and understandable regular reporting  Allow managers to manage  Provide councillors the financial information needed to set policies and priorities  Promote transparency in planning, budgeting, revenues, expenditure, accounting, fiscal reforms, etc.  Create an environment for an active municipal bond market Primary Aims of the Bill

 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 Bill

 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 Entities

 Promotes transparency and citizen involvement  Budget must be balanced  Facilitates good financial management and sound decision-making  Minimum standards for budget documents and in-year reporting  Adjustments and virements allowed, but regulated Budget Process

 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) Revenues

 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 Reporting

Responsibilities  Municipal manager = accounting officer  Accounting officer assigned financial management and reporting responsibilities  Accounting 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.

 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 Bill

Infrastructure, Capacity, Restructuring & Transformation Intergovernmental Transfers Local Government Transformation Programme Municipal Finance Mgt. Bill Municipal Systems Act Capacity Building Systems Property Rates Bill RSC Levy Own Source Revenue Fiscal Structures Act Demarcation Structural White Paper Constitution

SIYABONGA RE A LEBOHA BAIE DANKIE