DISTRIBUTED 19 Nov 2002 PCOF

SCHEDULE
REPEAL AND AMENDMENT OF LEGISLATION
(Section 119)

No. and year of Act

Short title of Act

Extent of repeal or amendment

Act No. 91 of 1983
Promotion of Local Government Affairs Act, 1983
The repeal of section 17(D).

Act No. 21 of 1988

Municipal Accountants Act, 1988
The repeal of the whole
Act No. 209 of 1993
Local Government Transition Act, 1993
The repeal of section 10G
Act No. 32 of 2000
Local Government: Municipal Systems Act, 2000
1.   The amendment of section 1 by the insertion after the definition of  "municipal entity" of the following definition:
    " Municipal Finance Management Act’  means the
        Local Government: Municipal Finance Management
        Act, 2002;"

2.   The substitution for section 9 of the following section:
      "[Assignments initiated by the executive to 
       municipalities generally] Assignment of additional
       functions and powers to municipalities by
        parliamentary or provincial Acts
       9.	(1)  A Cabinet member or Deputy Minister
       initiating the assignment of [a]an additional  function
       or [a] power by way of [national legislation] an Act
       of Parliament to municipalities [generally] must, 
       before the draft legislation providing for the 
       assignment is introduced in Parliament –
       (a)	  consult the Minister, the [national] Minister of 
              Finance and organised local government
              representing local government nationally;
       (b)	  consider any assessment by the Financial and
              Fiscal Commission in terms of subsection  (4);
              and
       (c)	  publish the draft legislation in terms of section
              154 (2)  of the Constitution.

	  (2)	An MEC initiating the assignment of [a] an additional function or [a] power by way of 
         [provincial legislation] a provincial Act to 
         municipalities in the province [generally] must,  
          before the draft legislation providing for the 
          assignment is introduced in the provincial 
          legislature –
          (a)   consult the National Treasury, the MEC
                 responsible for finance in the province,  the
                 MEC for local government in the province and
                  organised local government representing local 
                  government in the province;
          (b)   consider any assessment by the Financial and
                  Fiscal Commission in terms of subsection  (3);
                  and
           (c)   publish the draft legislation in terms of section 
                  154 (2)  of the Constitution.

                  (3)   The Cabinet member, Deputy Minister
            or MEC initiating the national or provincial
            legislation referred to in subsections (1) and (2),
            must take appropriate steps to ensure sufficient
            funding,  and capacity building initiatives as
            may be needed,  for the performance of the
            assigned function or power by the 
            municipalities concerned if –
            (a)   the assignment of the function or power
                    imposes a duty on the municipalities
                    concerned;
             (b)   that duty falls outside the functional areas
                     listed in Part B of Schedule 4 or Part B of 
                     Schedule 5 to the Constitution or is not 
                      incidental to any of those functional
                      areas;  and
             (c)    the performance of that duty has financial
                      implications for the municipalities
                      concerned.]

              (4)   The Cabinet member,  Deputy Minister or
        MEC initiating the legislation referred to in
        Subsections  (1)  and  (2),  must request the Financial
        And Fiscal Commission to make an assessment of the
        Financial implications of the legislation.

	   (5)	When draft legislation referred to in
         subsection (1) or  (2) is introduced in Parliament or 
         a provincial legislature, the legislation must be
         accompanied by(a)  a memorandum –
  (i)   giving at least a three year projection of the 
         financial implications of that function or 
         power for those municipalities; 
  (ii)  disclosing any possible financial liabilities or
         risks after the three year period; and 
 (iii)  indicating how any additional expenditure by
         those municipalities will be funded; and
        (b)  the assessment of the Financial and Fiscal
               Commission referred to in subsection (3)."

3.   The substitution for section 10 of the following sections:
"Assignment of additional functions and powers to municipalities in terms of legislation or by agreement
      10.   If an additional function is assigned to a
      municipality in terms of a power contained in an Act
      of Parliament or a provincial Act, or by agreement in
      terms of section 99 or 126 of the Constitution, the
      organ of state assigning the function or power must,
      before assigning the function or power submit to the 
      Minister and the National Treasury a memorandum –
      (a)    giving at least a three year projection of the
               financial implications of that function or 
               power for the municipality; and
      (b)    disclosing any possible financial liabilities or
               risks after the three year period; and 
      (c)     indicating how any additional expenditure
               by the municipality will be funded. 

        Funding and capacity building 
        10A.    The Cabinet member, MEC or other organ of
        state initiating an assignment of an additional
        function or power to a municipality or municipalities
        in terms of section 9 or 10 must take appropriate
        steps to ensure sufficient funding, and capacity
        building initiatives as may be needed,  for the
        performance of the assigned function or power by the
        municipality or municipalities if(a)	   the assignment of the function or power imposes
               a duty on the municipality or municipalities;
       (b)   that duty falls outside the functional areas listed
               in Part B of Schedule 4 or Part B of Schedule 5
               to the Constitution or is not incidental to any of
               those functional areas;  and
        (c)   the performance of that duty has financial
               implications for the municipality." 


4.   The substitution for section 46 of the following section:
"Annual performance reports
        46.   (1)   A municipality must prepare for each
        financial year a performance report reflecting (a)    the performance of the municipality and of each
                 service provider during that financial year;
        (b)    a comparison of those performances with
                 targets of and performances in the previous
                 financial year;
         (c)   the development and service delivery priorities
                 and the performance targets set by the
                 municipality for the next financial year; and
         (d)    measures that were taken to improve
                 performance.

                 (2)    An annual performance report must be
           included in the municipality’s annual report   
           referred to in section 66 of the Municipal Finance
           Management Act before the tabling of the annual
           report in the municipal council in terms of that
           Act.

                 (3)    If the inclusion of a performance report in
          an annual report would unduly delay the tabling of 
          the annual report, the MEC for local government in 
          the province may in writing allow the municipality 
          to table the performance report separately from the
          annual report after the expiry of the period 
          mentioned in section 68 (1) of the Municipal 
          Finance Management Act.

                  (4)    If a municipality has in terms of 
          subsection (3) been allowed to table its performance
          report separately from the annual report, section 68
          (3) to (6) of the Municipal Finance Management
          Act, read with the necessary changes as the context
          may require, applies with respect to the performance
          report and the report on the audit performed in 
          terms of section 45 (b) of this Act."

5.   The amendment of section 55 by the substitution for paragraph (c) of subsection (1) of the following paragraph:
   "(c)  proper and diligence compliance with 
           [applicable municipal finance management
                 legislation] the Municipal Finance  
                 Management Act and any regulations made 
                 under that Act."

6.    The amendment of section 57 –
(a)   by the substitution for paragraph (a) of subsection (2)
       of the following paragraph:
    "(a)   be concluded within a reasonable time after a
             person has been appointed as the municipal
             manager or as a manager directly accountable
             to the municipal manager, and thereafter,
             within one month [after] before the beginning 
             of the financial year of the municipality;"; and

(b)    by the insertion after subsection (4) of the following subsection:
    "(4A)  The provisions of the Municipal Finance Management Act conferring responsibilities on an accounting officer, must be regarded as forming part of the performance agreement of a municipal manager. Compliance with these provisions must be measured against the audit report on the financial statements of the municipality.

(4B)   Bonuses based on performance may be paid to a municipal manager or a manager directly accountable to the municipal manager only after assessing(a)     the official’s performance against the audit
          report on the financial statements and the audit
          report on the performance audit performed in
          terms of section 45 (b); and
(b)      the council’s response to those audit reports.".

7.    The repeal of section 58.

8.   The amendment of section 74 by the substitution for subsection (1) of the following subsection:
           "(1)  A municipal council must adopt and
       implement a tariff policy on the levying of fees for
         municipal services provided by the municipality
         itself or by way of service delivery agreements, and
         which complies with the provisions of this Act, the 
          Municipal Finance Management Act, any
          regulations made under that Act and [with] any
          other applicable legislation."

9.   The amendment of section 81 by –
(a)  the substitution for subparagraph (v) of paragraph (a)
      of subsection (2) of the following subparagraph:
    "(v)    managing its own accounting, financial
               management, budgeting, investment and
               borrowing activities within a framework of
               transparency, accountability, reporting and
               financial control determined by the
               municipality, subject to [applicable
               municipal finance management
                     legislation] the Municipal Finance
                     Management Act and any regulations made
                     under that Act;"; and
(b)  the insertion after paragraph (b) of the subsection (2)
       of section 81 of the following paragraph:
           "(c)  must ensure that the agreement provides for a dispute-resolution mechanism to settle disputes between the municipality and the service provider;". 

10.   The amendment of section 83 by the substitution for subsection (1) of the following subsection:
"(1)  If a municipality decides to provide a municipal service through a service delivery agreement with a person referred to in section 80 (1) (b), it must select the service provider through selection processes complying with a regulatory framework prescribed in terms of the Municipal Finance Management Act  and which –
      [(a)   are competitive, fair, transparent and cost-
              effective;]
(b)   allow all prospective service providers to have
        equal and simultaneous access to information 
        relevant to the bidding process;
      (c)   minimise the possibility of fraud and 
             corruption;
(d)   make the municipality accountable to the
        local community about progress with selecting
        a service provider, and the reasons for any
        decision in this regard; and
      (e)   takes into account the need to promote the
              empowerment of small and emerging 
              enterprises."

11.   The amendment of section 92 by the substitution for paragraph (b) of subsection (1) of the following paragraph:
        "(b)    must comply with [any legislation applicable
                   to the financial management of
                   municipalities and municipal entities] the
                   Municipal Finance Management Act and any
             regulations made under that Act.".

12.   The amendment of Schedule 1 by –
(a)  the insertion in item 11 after paragraph (a) of the
      following paragraphs: 
"(aA) 	interfere in the financial management responsibilities and functions assigned in terms of the Municipal Finance Management Act to the municipal manager as the accounting officer of the municipality or to the chief financial officer of the municipality; 
(aB) 	interfere in the actions of the municipal manager relating to the appointment, promotion, discipline, transfer or dismissal of staff;"; 

(b) 	the insertion after item 6 of the following item: 
"Rates, tariffs and rent payable by councillors 
6A.	(1) 	A councillor must promptly and diligently pay all rates, tariffs,rent and other money due to the municipality. 
(2) 	The municipal manager must notify the speaker of the council and the MEC for local government in writing if a councillor is in arrear with any of these payments for a period of longer than 30 days."; and 

(c) 	the insertion after item 12 of the following item: 
"Duty of municipal manager to report alleged
  breaches of Code 
12A.	 (1) If a municipal manager has a reasonable suspicion that a provision of this Code has been breached, the municipal manager must report the alleged breach to the speaker of the council and the MEC for local government. 
(2) Any action taken against a municipal manager because of that municipal manager’s compliance with subitem (1), is an unfair labour practice for the purposes of the Labour Relations Act, 1995 (Act No. 66 of 1995)."