Act No. 91 of 1983

Promotion of Local Government Affairs Act, 1983

The repeal of section 17(D).

Municipal Accountants Act, 1988

The repeal of the whole

Act No. 209 of 1993

Local Government Transition Act, 1993

The repeal of section 10G

Act No. 32 of 2000

Local Government: Municipal Systems Act, 2000

1. The amendment of section 1 by the insertion after the definition of "municipal entity" of the following definition:
" ‘Municipal Finance Management Act’ means the
 Local Government: Municipal Finance Management
 Act, 2002;"
2. The substitution for section 9 of the following section:
"[Assignments initiated by the executive to
municipalities generally] Assignment of additional
 functions and powers to municipalities by
 parliamentary or provincial Acts
 9.	(1) A Cabinet member or Deputy Minister
initiating the assignment of [a]an additional function
or [a] power by way of [national legislation] an Act
 of Parliament to municipalities [generally] must,
before the draft legislation providing for the
assignment is introduced in Parliament –
(a)	 consult the Minister, the [national] Minister of
Finance and organised local government
representing local government nationally;
(b)	 consider any assessment by the Financial and
Fiscal Commission in terms of subsection (4);
and
(c)	 publish the draft legislation in terms of section
154 (2) of the Constitution.

	 (2)	An MEC initiating the assignment of [a] an additional function or [a] power by way of
[provincial legislation] a provincial Act to
 municipalities in the province [generally] must,
before the draft legislation providing for the
assignment is introduced in the provincial
legislature –
(a) consult the National Treasury, the MEC
responsible for finance in the province, the
MEC for local government in the province and
organised local government representing local
government in the province;
(b) consider any assessment by the Financial and
Fiscal Commission in terms of subsection (3);
and
(c) publish the draft legislation in terms of section
154 (2) of the Constitution.
(3) The Cabinet member, Deputy Minister
or MEC initiating the national or provincial
legislation referred to in subsections (1) and (2),
must take appropriate steps to ensure sufficient
funding, and capacity building initiatives as
may be needed, for the performance of the
assigned function or power by the
municipalities concerned if –
(a) the assignment of the function or power
imposes a duty on the municipalities
concerned;
(b) that duty falls outside the functional areas
listed in Part B of Schedule 4 or Part B of
Schedule 5 to the Constitution or is not
incidental to any of those functional
areas; and
(c) the performance of that duty has financial
implications for the municipalities
concerned.]
(4) The Cabinet member, Deputy Minister or
MEC initiating the legislation referred to in
Subsections (1) and (2), must request the Financial
And Fiscal Commission to make an assessment of the
Financial implications of the legislation.
	 (5)	When draft legislation referred to in
 subsection (1) or (2) is introduced in Parliament or
 a provincial legislature, the legislation must be
 accompanied by—
(a) a memorandum –
 (i) giving at least a three year projection of the
 financial implications of that function or
  power for those municipalities;
 (ii) disclosing any possible financial liabilities or
 risks after the three year period; and
(iii) indicating how any additional expenditure by
 those municipalities will be funded; and
  (b) the assessment of the Financial and Fiscal
 Commission referred to in subsection (3)."
3. The substitution for section 10 of the following sections:
"Assignment of additional functions and powers to municipalities in terms of legislation or by agreement
 10. If an additional function is assigned to a
 municipality in terms of a power contained in an Act
 of Parliament or a provincial Act, or by agreement in
 terms of section 99 or 126 of the Constitution, the
 organ of state assigning the function or power must,
 before assigning the function or power submit to the
 Minister and the National Treasury a memorandum –
 (a) giving at least a three year projection of the
 financial implications of that function or
 power for the municipality; and
 (b) disclosing any possible financial liabilities or
 risks after the three year period; and
  (c) indicating how any additional expenditure
  by the municipality will be funded.
Funding and capacity building
 10A. The Cabinet member, MEC or other organ of
 state initiating an assignment of an additional
  function or power to a municipality or municipalities
 in terms of section 9 or 10 must take appropriate
 steps to ensure sufficient funding, and capacity
  building initiatives as may be needed, for the
 performance of the assigned function or power by the
 municipality or municipalities if –
(a)	 the assignment of the function or power imposes
 a duty on the municipality or municipalities;
 (b) that duty falls outside the functional areas listed
 in Part B of Schedule 4 or Part B of Schedule 5
 to the Constitution or is not incidental to any of
 those functional areas; and
 (c) the performance of that duty has financial
  implications for the municipality."

4. The substitution for section 46 of the following section:
"Annual performance reports
  46. (1) A municipality must prepare for each
 financial year a performance report reflecting –
(a) the performance of the municipality and of each
 service provider during that financial year;
 (b) a comparison of those performances with
 targets of and performances in the previous
  financial year;
  (c) the development and service delivery priorities
 and the performance targets set by the
 municipality for the next financial year; and
 (d) measures that were taken to improve
 performance.
 (2) An annual performance report must be
 included in the municipality’s annual report
 referred to in section 66 of the Municipal Finance
 Management Act before the tabling of the annual
  report in the municipal council in terms of that
 Act.

(3) If the inclusion of a performance report in
 an annual report would unduly delay the tabling of
 the annual report, the MEC for local government in
 the province may in writing allow the municipality
 to table the performance report separately from the
  annual report after the expiry of the period
  mentioned in section 68 (1) of the Municipal
 Finance Management Act.

(4) If a municipality has in terms of
 subsection (3) been allowed to table its performance
  report separately from the annual report, section 68
 (3) to (6) of the Municipal Finance Management
 Act, read with the necessary changes as the context
  may require, applies with respect to the performance
 report and the report on the audit performed in
 terms of section 45 (b) of this Act."
5. The amendment of section 55 by the substitution for paragraph (c) of subsection (1) of the following paragraph:
"(c) proper and diligence compliance with
[applicable municipal finance management
legislation] the Municipal Finance
 Management Act and any regulations made
 under that Act."
6. The amendment of section 57 –
(a) by the substitution for paragraph (a) of subsection (2)
of the following paragraph:
"(a) be concluded within a reasonable time after a
person has been appointed as the municipal
manager or as a manager directly accountable
to the municipal manager, and thereafter,
within one month [after] before the beginning
of the financial year of the municipality;"; and
(b) by the insertion after subsection (4) of the following subsection:
"(4A) The provisions of the Municipal Finance Management Act conferring responsibilities on an accounting officer, must be regarded as forming part of the performance agreement of a municipal manager. Compliance with these provisions must be measured against the audit report on the financial statements of the municipality.
(4B) Bonuses based on performance may be paid to a municipal manager or a manager directly accountable to the municipal manager only after assessing –
(a) the official’s performance against the audit
 report on the financial statements and the audit
  report on the performance audit performed in
 terms of section 45 (b); and
(b) the council’s response to those audit reports.".
7. The repeal of section 58.
8. The amendment of section 74 by the substitution for subsection (1) of the following subsection:
"(1) A municipal council must adopt and
implement a tariff policy on the levying of fees for
municipal services provided by the municipality
itself or by way of service delivery agreements, and
which complies with the provisions of this Act, the
 Municipal Finance Management Act, any
 regulations made under that Act and [with] any
other applicable legislation."
9. The amendment of section 81 by –
(a) the substitution for subparagraph (v) of paragraph (a)
of subsection (2) of the following subparagraph:
"(v) managing its own accounting, financial
management, budgeting, investment and
borrowing activities within a framework of
transparency, accountability, reporting and
financial control determined by the
municipality, subject to [applicable
municipal finance management
legislation] the Municipal Finance
 Management Act and any regulations made
 under that Act;"; and
(b) the insertion after paragraph (b) of the subsection (2)
of section 81 of the following paragraph:
"(c) must ensure that the agreement provides for a dispute-resolution mechanism to settle disputes between the municipality and the service provider;".

10. The amendment of section 83 by the substitution for subsection (1) of the following subsection:
"(1) If a municipality decides to provide a municipal service through a service delivery agreement with a person referred to in section 80 (1) (b), it must select the service provider through selection processes complying with a regulatory framework prescribed in terms of the Municipal Finance Management Act and which –
 [(a) are competitive, fair, transparent and cost-
effective;]
(b) allow all prospective service providers to have
equal and simultaneous access to information
relevant to the bidding process;
(c) minimise the possibility of fraud and
corruption;
(d) make the municipality accountable to the
local community about progress with selecting
a service provider, and the reasons for any
decision in this regard; and
(e) takes into account the need to promote the
empowerment of small and emerging
enterprises."
11. The amendment of section 92 by the substitution for paragraph (b) of subsection (1) of the following paragraph:
 "(b) must comply with [any legislation applicable
to the financial management of
municipalities and municipal entities] the
 Municipal Finance Management Act and any
 regulations made under that Act.".
12. The amendment of Schedule 1 by –
(a) the insertion in item 11 after paragraph (a) of the
following paragraphs:
"(aA) 	interfere in the financial management responsibilities and functions assigned in terms of the Municipal Finance Management Act to the municipal manager as the accounting officer of the municipality or to the chief financial officer of the municipality;
(aB) 	interfere in the actions of the municipal manager relating to the appointment, promotion, discipline, transfer or dismissal of staff;";
(b) 	the insertion after item 6 of the following item:
"Rates, tariffs and rent payable by councillors
6A.	(1) 	A councillor must promptly and diligently pay all rates, tariffs,rent and other money due to the municipality.
(2) 	The municipal manager must notify the speaker of the council and the MEC for local government in writing if a councillor is in arrear with any of these payments for a period of longer than 30 days."; and

(c) 	the insertion after item 12 of the following item:
"Duty of municipal manager to report alleged
breaches of Code
12A.	 (1) If a municipal manager has a reasonable suspicion that a provision of this Code has been breached, the municipal manager must report the alleged breach to the speaker of the council and the MEC for local government.
(2) Any action taken against a municipal manager because of that municipal manager’s compliance with subitem (1), is an unfair labour practice for the purposes of the Labour Relations Act, 1995 (Act No. 66 of 1995)."