A Guide for Councillors

Part 5 Understanding the Municipal Finance Management Act

The MFMA requires municipalities to adopt a supply chain management policy that is fair, transparent, competitive and cost-effective and applies to the following processes: procurement of goods and services selection of contractors to provide municipal services selling assets, including goods that the municipality no longer needs. National Treasury has provided a model supply chain management policy to assist municipalities (MFMA circular number 22 of 2005). • • •

The mayor must explain to the following people the reasons for deviating from a recommendation of the tender committee: the Auditor-General the relevant provincial treasury the National Treasury municipal tender committees. Where applicable, the Chief Executive Of fi cer of a municipal entity must explain any deviations to the parent municipality. • • • •

5.4 Conclusion Councillors can promote the Batho Pele principles of “value for money” and “openness and transparency”, by using the SDBIP. Councillors must consider whether using entities can improve service delivery and they must also ensure that procurement processes are open and transparent. Good plans and policies can build the public’s con fi dence in local government.

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The Role of Councillors in Municipal Finance Management