A Guide for Councillors

Part 5 Understanding the Municipal Finance Management Act

This will help determine whether the external mechanism is the best way to provide the service and whether the municipality has the ability to manage it. A municipality must set up a service delivery agreement with the entity involved. The municipality is accountable for the performance of the service provider and must have the capacity to monitor how well they are performing.

IF WE DECIDE TO SET UP AN ENTITY FOR THIS, WE MUST INFORM THE COMMUNITY, ORGANISED LABOUR, NATIONAL TREASURY, DPLG AND THE MEC FOR LOCAL GOVERNMENT IN THE PROVINCE OF OUR DECISION.

WE ARE STILL RESPONSIBLE FOR THE PERFORMANCE OF THE ENTITY. THE ENTITY IS STILL ACCOUNTABLE TO THE MUNICIPALITY AND WE AS COUNCIL ARE STILL ULTIMATELY ACCOUNTABLE TO THE COMMUNITY.

IT IS MY DUTY TO REMIND COUNCILLORS THAT THEY MAY NOT BE ON THE BOARDS OF THE ENTITY IF WE DO GO THIS ROUTE.

5.3 Supply chain management

MUNICIPALITIES CAN WASTE A LOT OF TAX-PAYERS MONEY IF THEY DON ‛ T FOLLOW GOOD POLICIES. THE POLICY IS TO COMBAT FRAUD, CORRUPTION AND PREVENT CONFLICTS OF INTEREST.

THE BATHO PELE PRINCIPLES OF VALUE FOR MONEY AND TRANSPARENCY ALSO APPLY TO SUPPLY CHAIN MANAGEMENT.

COUNCIL MUST HAVE A SUPPLY CHAIN MANAGEMENT POLICY. THE POLICY SAYS WHAT PROCEDURES MUST BE FOLLOWED WHEN THE MUNICIPALITY BUYS GOODS OR SERVICES.

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The Role of Councillors in Municipal Finance Management