A Guide for Councillors

The Role of Councillors in Municipal Finance Management

Introduction

3. 3 Administrative accountability ............................................................................................. 35 Overseeing staff ...................................................................................................................... 35 The organisational structure .......................................................................................... 35 Setting the number of staff ............................................................................................ 36 Appointing senior managers .......................................................................................... 37 Appointing other of fi cials................................................................................................ 37 Human resource management ...................................................................................... 38 Overseeing assets, liabilities, revenue and expenditure......................................................... 39 3.4 Fighting corruption ............................................................................................................... 41 Codes of conduct for councillors and of fi cials......................................................................... 41 3.5 Conclusion............................................................................................................................. 42 Part 4: Municipal planning and budgeting ......................................................... 43 4.1 The role of councillors in budgeting .................................................................................. 44 The role of the mayor .............................................................................................................. 44 The role of councillors............................................................................................................. 45 4.2 Linking budgets to municipal plans.................................................................................... 46 Multi-year budgeting ............................................................................................................... 48 Previous year’s budget .................................................................................................. 49 Current year’s budget .................................................................................................... 49 The forthcoming medium-term budget ........................................................................... 51 The budget cycle..................................................................................................................... 51 Implications for councillors for each step in the process................................................ 52 4.3 Voting on the budget ............................................................................................................. 54 4.4 Conclusion.............................................................................................................................. 55 Part 5: Delivering services ................................................................................ 57 5.1 Service delivery and budget implementation plan (SDBIP) .............................................. 57 Why have an SDBIP? ............................................................................................................. 59 5.2 Mechanisms for providing services ..................................................................................... 61 Internal service delivery ........................................................................................................ 61 External service delivery ......................................................................................................... 61 5.3 Supply chain management................................................................................................... 63 5.4 Conclusion............................................................................................................................. 65 Part 6: Using reports and resolving financial problems ..................................... 67 6.1 Using fi nancial statements................................................................................................... 67 Financial statements ............................................................................................................... 68 The Auditor-General’s report................................................................................................... 70 The annual report.................................................................................................................... 70 The oversight report ................................................................................................................ 70 6.2 Resolving fi nancial issues ................................................................................................... 71 What kinds of problems are considered serious? ................................................................... 71 Financial problems in a municipal entity ................................................................................. 73 6.3 Conclusion.............................................................................................................................. 73 Useful resources and references ............................................................................................ 74

vi

Understanding the Municipal Finance Management Act