Municipal Finance Management Act: Regulations - Juta - Law

STAATSKOERANT, 13 JULIE 2012 No.35500 29 NOTICE 556 OF 2012 NATIONAL TREASURY LOCAL GOVERNMENT: MUNICIPAL FINANCE MANAGEMENT ACT (ACT 58 OF 2003) DRAFT MUNICIPAL FINANCIAL MISCONDUCT REGULATIONS CALL FOR COMMENTS I, Pravin Gordhan, Minister of Finance, after consultation with the Minister of Cooperative Governance and Traditional Affairs, hereby publish the draft regulations made, in terms of section 168 and 175 read with chapter 15, for public comment in terms of section 169(1)(b) of the Municipal Finance Management Act 56 of 2003, as set out in the Schedule. Interested persons may submit their comments on the draft regulations in writing on or before 31 August 2012 to: The Director-General, c/o Mr TV Pillay, National Treasury, Private Bag X115, Pretoria, 0001, or

per fax to (012) 315-5230 or e-mail to MFMA@treasury.gov.za. Kindly provide the name, address, telephone, fax numbers and e-mail address of the person or organisation submitting the comments. PRA V IN GORDHAN MINISTER OF FINANCE 30 No.35500 GOVERNMENT GAZETTE, 13 JULY 2012 EXPLANATORY MEMORANDUM Municipal Financial Misconduct Regulations The implementation of the Municipal Finance Management Act (MFMA) in all municipalities and entities remains an important strategy to modernise and improve financial management and service delivery. Unked to this strategy are the fundamental principles of effective and efficient utilisation of public resources and transparent and accountable financial management practices. Whilst many of the reforms that form part of this strategy have been implemented over the last seven years, and much has been done to provide various training and capacity building initiatives, it has become imperative to strengthen the enforcement provisions enabled in the MFMA. To give effect to the priorities outlined in government outcomes and to address recent requests to provide further regulations in dealing effectively with matters of financial misconduct, the attached set of regulations were developed to complement the amendment to the Local Government: Municipal Systems Act, 2000 ( Act No 32 of 2000) ("MSA'') as amended and regulations issued in terms thereof. These regulations give effect to the Medium Term Strategic Framework for 2009 - 2014 to introduce measures to combat corruption in the public and private sectors through advocacy, strengthening the legal and policy prescripts and frameworks and implementation thereof. The Auditor-General has highlighted a number of issues in the Consolidated Report on Local Government Audits for 2009/1 0 that include, among others, non-adherence to financial management policies and prescripts, as well as the need to improve governance arrangements. A significant number of municipalities have incurred unauthorised, irregular as well as fruitless and wasteful expenditure. The regulations on financial misconduct will support measures to expeditiously address contraventions of financial misconduct and mismanagement. Section 175 of the MFMA grants the Minister of Finance the power to make regulations dealing with financial misconduct and related matters. The objective of the Financial Misconduct Regulations is to set out processes and procedures that municipalities and entities must follow when dealing with financial misconduct. The regulations will apply to all officials and political office bearers within municipalities and municipal entities. STAATSKOERANT, 13 JULIE 2012 No. 35500 31 The Financial Misconduct Regulations consist of four chapters to assist with its implementation. The first...

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