Treasury effect change on municipal expenditure
11:31 Wed, 12 Jun 2019
Treasury effect change on municipal expenditure | News Article
Municipalities in the country will no longer be allowed to spend funds on alcohol, catering for internal meetings only attended by officials, on procurement for luxury vehicles and on the appointment of consultants to perform municipal functions.

This, as the new municipal cost containment measures are set to take effect from the 1st of July. 

Finance Minister, Tito Mboweni, in consultation with the Cooperative Governance and Traditional Affairs (Cogta) minister, Nkosazana Dlamini-Zuma, published the new stringent measures which are set to cut down wasteful expenditure at local government. 

According to the regulations, the contracting of consultants will be limited and only be made use of in cases where the municipality has no requisite skills or resources to perform the function. 

OFM News’ Katleho Morapela reports that this is one of the troublesome factors that have in the past been listed by the Auditor-General as a wasteful expenditure by municipalities across the country.

Before appointing a consultant, municipalities will as of next month have to negotiate payments, set a cost ceiling, and reach an agreement that the consultant will help with in-house training of municipal staff. 

The regulations also introduce a limitation in terms of the value of the vehicles to be procured and the management thereof by municipalities and municipal entities.

Travel and subsistence allowances are also being limited. According to the regulation, this will provide a threshold for the purchasing of air tickets, provides limitations on international travel and the hiring of vehicles.

“Entity officials or political office bearers must, as a first option, use municipal fleet vehicles where viable, before incurring costs of hired vehicles.”

Mboweni has further outlined that the issuance of credit or debit cards linked to municipal bank accounts to officials or public office bearers, or the board of directors of municipal entities, must be limited, meaning such officials must make use of their cash, their personal credit cards or arrangements made by the municipality or entity and request reimbursements in terms of the municipal policy.

OFM News

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