Municipal cost-containment measures gazetted as state seeks to tighten its belt

The national treasury has gazetted far-reaching cost-containment measures for municipalities which include limiting the use of consultants, limiting business class air travel, preventing the use of municipal resources for election campaigns and forcing mayors to limit their spending on cars and increasing their use of public transport.

The regulations were gazetted on Friday and follow on the back of a resolution by the ANC national executive committee lekgotla resolution to decentralise procurement in the state and review the Public Finance Management Act and the Municipal Finance Management Act.

READ MORE: ANC wants to shake up procurement

The regulations form part of cost-cutting measures by the state as it seeks to improve its balance sheet.

According to the regulations — published in the government gazette on Friday by the Minister of Finance Tito Mboweni and the Minister of Cooperative Governance Nkosazana Dlamini-Zuma — municipalities have to tighten their belts on spending going forward.

“Municipal resources may not be used to fund elections, campaign activities, including the provision of food, clothing, printing of agendas and brochures and other inducements as part of, or during election periods or to fund any activities of any political party at any time,” the regulations gazetted on Friday said.

The regulations published limit the scope for consultants to fleece the state.

Auditor General Kimi Makwetu has repeatedly called for stricter controls over the use of consultants at municipal level. The latest regulation calls for strict adherence to guidelines in appointing consultants as well as guidelines in monitoring their performance and efficacy.

A cost containing measure set to rile up mayors and municipal bigwigs is the regulation on vehicles. South African mayors are infamous for their propensity for fancy cars: the regulation stipulates that 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.

Mayors may also only travel business class if their flight exceeds five hours — 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 state. 

The regulations also extend to the use of credit cards, sponsorships, events and training.

“An accounting officer must ensure that no credit card or debit card linked to a bank account of a municipality or a municipal entity is issued to any official or political office bearer, including members of the board of directors of municipal entities,” it says.

“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.”

This is set to ensure that spending using municipal credit cards are curbed in addition to spending on catered for meetings and events.

According to the regulations, only meetings, conferences, workshops or events exceeding five hours may be paid for by the state and strict guidelines are provided in catering for events, team-building and year-end functions. 

Municipal Cost Containment Regulations, 2019 by Mail and Guardian on Scribd

Natasha Marrian
Natasha Marrian
Marrian has built a reputation as an astute political journalist, investigative reporter and commentator. Until recently she led the political team at Business Day where she also produced a widely read column that provided insight into the political spectacle of the week.

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