A Guide for Councillors

Understanding the Municipal Finance Management Act

Introduction

Contents Foreword from the Minister of Finance................................................................ ii An overview........................................................................................................iii Introduction to this guide.................................................................................... 1 What is the role of councillors in municipal fi nancial management?....................................... 3 Meet our councillors ...................................................................................................................... 5 How the MFMA helps councillors ................................................................................................. 6 Part 1: What is the MFMA? .................................................................................. 8 Which is best for my community?................................................................................................ 9 1.1 Financial management in local government ...................................................................... 10 1.2 How the MFMA helps councillors ........................................................................................ 12 Working with other spheres of government ............................................................................ 12 Promoting development in communities ................................................................................ 14 Improving service delivery ...................................................................................................... 16 Overseeing municipal activities............................................................................................... 17 1.3 Starting implementation ....................................................................................................... 19 Getting access to reports ........................................................................................................ 19 Progress reports on implementation ....................................................................................... 20 Establishing a Steering Committee......................................................................................... 20 Part 2: Separation of powers in a municipality .................................................. 21 The key to good governance in local government relies on several factors ........................... 21 2.1 Separation of executive and administrative powers ....................................................... 22 Roles and responsibilities in a municipality............................................................................. 23 Councillors ..................................................................................................................... 23 The executive mayor, mayor or executive committee.................................................... 25 The municipal manager ............................................................................................... 25 The chief fi nancial of fi cer ............................................................................................... 26 Senior managers ........................................................................................................... 26 Municipal of fi cials........................................................................................................... 26 Tasks that are delegated................................................................................................ 26 Structures for fi nancial governance ........................................................................................ 27 Council structures .......................................................................................................... 27 The fi nancial governance framework ...................................................................................... 29 Delegation of responsibilities ......................................................................................... 29 2.2 Conclusion............................................................................................................................. 30 Part 3: Political and administrative accountability ............................................. 31 3.1 Planning and accountability ................................................................................................ 32 3.2 Political accountability ......................................................................................................... 33 Setting direction ..................................................................................................................... 33 Setting objectives and priorities ............................................................................................. 34 Establishing fi nance policy............................................................................................. 34

v

The Role of Councillors in Municipal Finance Management