July 2, 2004
By Thomas Thale
THE City of Johannesburg has already introduced many of the changes required by the Municipal Finance Management Act, which comes into effect on Thursday 1 July.
Some provisions of the act will, however, be phased in over time.
Bethuel Jwili, who is co-ordinating this legislation for the City, said a gap analysis instituted in March had concluded that the City was "largely complying with the provisions of the act".
The aim of the act - according to Trevor Manuel, the minister of finance - is "to modernise budget and financial management, and to ensure greater transparency and accountability in the finances of municipalities".
The act also sets out to standardise financial management in all government departments and entities.
Manuel said the Treasury had conducted "a series of workshops across all nine provinces" involving more than 2 000 officials and councillors.
"The workshops provided a forum for extensive training, discussion and consultation on the reforms contained in the act."
Jwili said the Treasury had been monitoring the City - one of its pilot municipalities for the phasing in of the act - since 2001. "We have been hard at work, changing systems since then," said Jwili.
Jwili said the City had already changed from the fund-accounting system to the generally accepted municipal accounting principle (Gamap).
"We are now busy preparing financial statements in terms of Gamap," said Jwili.
Manuel said some provisions of the act "require transparency in budget and budgeting processes, as well as uniform treasury norms and standards".
The act also requires municipalities to table quarterly reports on their spending and revenue.
One of the major adjustments the City will have to make is in its budgetary process. The act requires the formulation of the budget to be put in motion 10 months sooner. Public participation in the budget and in the Integrated Development Plan would also begin earlier.
The mayor would have to table his proposed budget 90 days sooner. The budget has to be approved by the council 30 days before it comes into effect.
Jwili said the council would have no problem bringing the processes forward.
As for new debts, the act stipulates that councillors and the public must be notified of intended borrowing 21 days before the council sits to consider the matter.
Jwili said the City would have no problem complying with the requirement that it have one primary bank account. "We have several accounts with Absa, but we've already identified the one we will use as our primary bank account," said Jwili.
Jwili said the City already complied with the provision that municipalities publish all budget and the IDP documents on their websites.
To get councillors to play "an oversight role", the act stipulates that they will "no longer serve on tender committees and boards of municipal entities".
The act promises to usher in a new era of transparency and accountability for municipalities.
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