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New municipal cost containment rules won’t help without enforcement

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Michael is a businessman and former mayor of Mogale City. He fights for the rights of all communities and joined OUTA in early 2018 to expose and oppose corruption, maladministration and malfeasance at local government.

All moves to improve oversight over local government, tighten controls and cut wasteful and dishonest spending are welcomed. However, we need urgent action from Parliament to reinstate the Municipal Systems Amendment Act, active oversight of municipalities by provincial and national CoGTA and treasuries, to ensure safeguards such as that the new regulations are implemented, and that there is determined investigation and prosecution of wrongdoers.

The new regulations tightening control over municipal spending should stop the bankrupt Govan Mbeki Local Municipality from spending R2.244-million on a new car for the mayor.

The regulations intend to block profligate spending such as Govan Mbeki’s plan in its draft budget for 2019/20 for a new car for the mayor, even if the municipality tried to hide it by spreading it over three years. The regulations limit the threshold for vehicle purchases for political office bearers to R700,000 or 70% of the total annual remuneration package. The budget which Govan Mbeki’s council subsequently approved (not yet published on the municipality’s website) apparently removes the car plan.

There is an urgent need for public officials to be far more careful with public funds and the new regulations are a step in the right direction. The public can now help to make sure their municipalities adhere to these rules, but the regulations will serve no purpose unless there is real action by the authorities if they are ignored.

The Municipal Cost Containment Regulations were issued in terms of the Municipal Finance Management Act (MFMA) in June 2019 and are effective from 1 July 2019. They apply to municipalities and their entities, who have known about them since the draft regulations were published in February 2018. The regulations extend the cost containment measures being implemented at national and provincial level to the local level, where there is little effective oversight and many municipalities simply refuse to prioritise core services.

The cost containment regulations ban the use of all official credit cards, limit and tighten up control of the use of consultants, limit spending on vehicles used by political office bearers, limit flight expenses, prioritise the use of the municipal fleet or public transport over hiring vehicles for political office bearers and officials, and substantially cut catering and expenses linked to functions, conferences, meetings and security for individuals. They also require municipalities to write cost containment policies, and regularly report on their cost containment measures and savings to enhance transparency and local accountability.

Unfortunately, the mere existence of laws and regulations rarely ensures adherence by municipalities.

For example, the budget which Govan Mbeki passed blatantly contravenes the MFMA and ignores the public consultation requirements, but there appears to be no attempt by those responsible for oversight to hold anyone to account.

We have raised these issues of entrenched excessive spending and executive lifestyles of the local administration and politicians on several occasions with provincial and national departments of Cooperative Governance and Traditional Affairs (CoGTA) and Finance. It is about time that the MECs and ministers start taking frustrations and concerns of civil society organisations and citizens seriously.

Many municipalities are under intervention by provincial governments – there are 15 municipalities under intervention in North West alone – but the failure of those interventions is evident in the ongoing failure of municipalities to pay Eskom and water board bills, the collapse of essential services and the routine reports of irregular spending. Govan Mbeki is under intervention by Mpumalanga but that didn’t stop the council from passing an incoherent and illegal budget. Why didn’t the Mpumalanga government and National Treasury enforce a financial recovery plan and realistic budget?

While the new regulations are welcome, it is unfortunate that South Africa recently lost a crucial piece of law aimed at professionalising municipalities.

In March, the Municipal Systems Amendment Act of 2011 fell away as Parliament had failed to meet a two-year Constitutional Court deadline to remedy defects in how the law was passed.

The Municipal Systems Amendment Act professionalised local government, including setting minimum standards of qualifications and experience for key positions, forbidding the re-employment for 10 years of those dismissed for financial misconduct, blocking senior managers from simultaneously holding political office, setting national caps on salaries, and making it illegal for councillors to vote in favour of motions which flout the law.

The court battle over the legality of the law heard how the law was drafted to block state capture of municipalities.

The loss of those safeguards has disastrous consequences for opposing corruption and mismanagement in local government. There is now a legal gap, allowing municipalities to hire officials without adequate qualifications or skills and substantially reducing oversight.

We welcome all moves to improve oversight over local government, tighten controls and cut wasteful and dishonest spending. However, we need urgent action from Parliament to reinstate the Municipal Systems Amendment Act, active oversight of municipalities by provincial and national CoGTA and Treasuries to ensure safeguards like the new regulations are implemented, and determined investigation and prosecution of wrongdoers.

We cannot wait any longer. DM

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