Finance

[1]  Yes, Provincial Treasury evaluates the compliance of municipal budgets with applicable legislation.

[a] The evaluation of compliance of municipal budgets to applicable legislation is conducted on an annual basis, primarily as part of the Local Government Medium Term Expenditure Committee [LG MTEC] 3 budget assessment processes mainly focussed on three broad areas namely: budget compliance [conformance] to applicable legislation, budget responsiveness and budget credibility and sustainability.  From a budget compliance perspective, budgets are assessed utilizing key applicable legislation which primarily include Chapter 4 [mainly sections 15 to 27] of the Local Government: Municipal Finance Management Act [Act 56 of 2003] [MFMA], the Municipal Budget and Reporting Regulations [MBRR] [No 32141 issued on 17 April 2009] and the annual National and Provincial Treasury Budget Circulars issued to assist and guide municipalities in finalising the annual budgets.

[b] The evaluation of compliance of municipal budgets to applicable legislation is conducted on an annual basis pursuant to Municipalities tabling the draft annual budget, which is annually by 31 March. The outcome of the assessment on the compliance levels to relevant legislation is shared with individual municipalities before and during the LGMTEC 3 budget assessment process which is an annual process scheduled between April and May.  Pursuant to municipalities tabling their final annual budgets for approval [by latest 31 May], Provincial Treasury conducts a final budget assessment, during July, which includes a legislative compliance assessment. 

[c]  The evaluation of compliance of municipal budgets to applicable legislation is conducted on an annual basis by respectively Provincial Treasury, Department of Local Government and Department of Environmental Affairs and Development Planning.

[d] The steps that are taken when applicable legislation is violated, particularly where municipalities have failed to prepare the budget documentation in the required format as required by the MBRR or failure to table, consider or approve the budget within the timeframes as set out in the MFMA, non-compliance letters are issued by the Minister responsible for Finance to the Mayor of the municipality, who is responsible for the budget,  to make him/her aware of the non-compliance, the implications and requesting the Mayor to respond on measures that will be instituted by the Municipality to address the areas of non-compliance.  The relevant legislation, most notable the Constitution of SA, the MFMA and MBBR are used by Provincial Treasury as the basis for any intervention measures when applicable legislation is violated.

[e] Action taken during the past two years in cases where there was none compliance to applicable legislation includes in the main, non-compliance letters issued by the Minister responsible for Finance to the Mayor of the municipality making him/her aware of legislative non-compliance and associated implications, non-compliance letters issued by the administrative Head of Treasury to the Municipal Manager of the defaulting municipality, and key was providing the requisite advice, training and support via the relevant IGR structures to defaulting municipalities, aimed at remedying the non-compliance with applicable legislation.