A Guide for Councillors

Part 6 Understanding the Municipal Finance Management Act

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A fi nancial recovery plan must address: revenue systems expenditure systems fi nance policy and procedures all aspects of fi nancial management. • • • •

Financial problems in a municipal entity

IF A MUNICIPAL ENTITY HAS FINANCIAL PROBLEMS, IT MUST ADVISE THE PARENT MUNICIPALITY. THE BOARD OF DIRECTORS MUST DEVELOP A PLAN TO DEAL WITH THE PROBLEMS. IF THEY FAIL, THE COUNCIL MUST MAKE THEM FOLLOW A FINANCIAL RECOVERY PLAN.

WHAT ABOUT MUNICIPAL ENTITIES? ARE WE ALSO RESPONSIBLE FOR THEIR FINANCIAL PROBLEMS?

THE PARENT MUNICIPALITY CAN ALSO DECIDE TO USE ALTERNATIVE SERVICE DELIVERY MECHANISMS

6.3 Conclusion The MFMA makes sure that councillors are accountable for the performance of the council. It requires the of fi cials to provide the necessary reports and to follow the policies that make this oversight possible. Other spheres of government and government departments support municipalities where needed. By understanding their role and the tools that they can use, councillors can ensure that council meets the needs of the people they serve.

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The Role of Councillors in Municipal Finance Management