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Municipal Cost Containment Regulations Drawn Up

June 10, 2019

National Treasury

10 June 2019

Municipal Cost Containment Regulations will come into force on 1 July 2019.

National treasury announced this in Government Gazette 42514 in terms of the Local Government: Municipal Management Act.

The regulations were drawn up with the concurrence of the cooperative governance and traditional affairs minister.

The regulations are designed to “ensure that resources of a municipality and municipal entity are used effectively, efficiently and economically by implementing cost containment measures”.

They apply to all officials and political office bearers in municipalities and municipal entities.

Included in the regulations is, inter alia, cost containment policies; use of consultants, travel and subsistence; domestic accommodation; credit cards; communication, conferences, meetings and study tours and disclosures of cost containment measures.

All municipalities or municipal entities are expected to draw up and implement a cost containment policy.

As regards use of consultants, a “municipality or municipal entity may only appoint consultants if an assessment of the needs and requirements confirms that the affected municipality or municipal entity does not have the requisite skills or resources in its full -time employ to perform the function”.

In terms of vehicles for political office-bearers for official use, the price of such vehicles must not exceed R700 000 or 70% (VAT inclusive) of the total annual remuneration package for the different grades of municipalities, as defined in the Public Office Bearers Act and the notices issued in terms thereof by the cooperative governance and traditional affairs minister, whichever is lower.

Going forward, no credit cards will be issued to any official or political office bearer, including members of the board of directors of municipal entities.

If officials or political office bearers of municipalities need to fly somewhere on a flight of five hours or less, only economy class tickets can be purchased.

Meanwhile, in Notice 316, treasury announced the repeal of Staff Regulations made in terms of the Land Bank Act of 1944.

Section 52(1) of the Land and Agricultural Development Bank Act of 2002, that repealed the Land Bank Act, provided for the continuation of Land Bank Act regulations until repealed.

In Notice 856, treasury announced that the Co-operative Banks Development Agency has issued a Certificate of Registration to the National Association of Co-operative Financial Institutions of South Africa as a representative body of its affiliated co-operative financial institutions.

The Certificate of Registration was issued in terms of the Co-operative Banks Act of 2007.