Seven ways National Treasury aims to tighten municipal spending

13 June 2019 - 07:34 By Unathi Nkanjeni
Finance minister Tito Mboweni.
Finance minister Tito Mboweni.
Image: Ruvan Boshoff

From international travel to expensive overnight accommodation, these are the municipal expenditures the National Treasury aims to cut spending on.

The Municipal Cost Containment Regulations for 2019 were drafted in line with the Municipal Finance Management Act of 2003 and shared on June 7.

According to finance minister Tito Mboweni, these regulations are aimed at ensuring the resources of municipalities and municipal entities are used effectively, efficiently and economically.

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Here are seven areas in which treasury hopes to cut down:

Use of consultants

The National Treasury said a municipality or municipal entity may only appoint consultants if an assessment of the needs and requirements confirms that the affected municipality or municipal entity does not have the requisite skills or resources in its full-time employ to perform the function.

"The accounting officer must adopt a fair and reasonable remuneration framework for consultants, taking into account the rates, including overall cost ceilings, by specifying costs that the municipality or municipal entity will be incurring by procuring the consultant’s services," the regulations said.

Business class air travel

The regulations said mayors may only travel business class if their flight exceeds five hours, this implying international travel.

"The cost containment policy must limit international travel to meetings or events that are considered critical. The number of officials or political office bearers attending such meetings or events must be limited to those officials or political office bearers directly involved in the subject matter related to such meetings or events," the regulations stated.

Election campaigns

The regulations said municipal resources may not be used to fund elections or any other campaign activities.

"Expenditure on tools of trade for political office bearers must be limited to the upper limits as approved and published by the Cabinet member responsible for local government in terms of the Remuneration of Public Office Bearers Act, 1998," the regulations said.

Vehicles

The regulations said spending on vehicles has to be limited according to the grade of municipality and that before procuring a vehicle other options, such as public transport, should be considered.

"An official or a political office bearer of a municipality or municipal entity must utilise the municipal fleet, where viable, before incurring costs to hire vehicles or make use of available public transport or shuttle service if the cost of such a service is lower than the cost of hiring a vehicle, the cost of kilometres claimable by the official or political office bearer and the cost of parking," said the regulations.

Earlier this week, Mboweni and cooperative governance and traditional affairs minister Nkosazana Dlamini-Zuma warned mayors to use public transport or shuttles and stop hiring expensive luxury cars.

Accommodation and meals

The regulations said overnight accommodation may only be booked where the return trip exceeds 500 kilometres.

"An accounting officer must ensure that costs incurred for domestic accommodation and meals are in accordance with the maximum allowable rates for domestic accommodation and meals as communicated from time to time by the National Treasury through a notice," said the regulations.

Credit cards

The regulations stated that there should be no credit card or debit card linked to a bank account of a municipality or a municipal entity issued to any official or political office bearer, including members of the board of directors of municipal entities.

"Where officials or political office bearers incur expenditure in relation to official municipal activities, such officials or political officer bearers must use their personal credit cards or cash or arrangements made by the municipality or municipal entity, and request reimbursement in accordance with the written approved policy and processes," the regulations said.

Events and catering

The regulations stated that a municipality or municipal entity may not incur catering expenses for meetings which are only attended by persons in the employ of the municipality or municipal entity, unless the prior written approval of the accounting officer is obtained.

"Entertainment allowances of qualifying officials may not exceed two thousand rands per person per financial year, unless approved otherwise by the accounting officer.

"A municipality or municipal entity may not incur expenses on alcoholic beverages unless the municipality or the municipal entity recovers the cost from the sale of such beverages," said the regulations.


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