P84-US 119334 Slides-2023

19/10/2023
Municipal Minimum Competency Training BACKGROUND

Programme –US 119334
P84 West Coast District

Municipality & B Municipalities: • The MMC programme is intended for municipal Accounting Officers, Chief
Municipal Minimum Competence Financial Officers, Senior Managers, Other Financial Officials; Heads of
Programme 2023-2025
Supply Chain Management and Supply Chain Management Officials in
23-24 October 2023 adherence to the Municipal Regulations on Minimum Competency Levels
(RSA, Government Gazette 29967, 2007) as amended (RSA, Government
Gazette 41996, 2018)
• The Regulations provide for Competencies & Qualifications per post, both
related to Unit Standards as in following table:
Presented by: Mr. Johnny Douglas
Photo by Stefan Els
Economic and Management Sciences | EyeNzululwazi ngoQoqosho noLawulo | Ekonomiese en Bestuurswetenskappe Economic and Management Sciences | EyeNzululwazi ngoQoqosho noLawulo | Ekonomiese en Bestuurswetenskappe
1 2
BACKGROUND BACKGROUND
26 US ID’s: REQUIREMENTS REGARDING QUALIFICATIONS

116361
119350
116339
116340
116341
116342
116343
116344
116345
116346
116347
116348
116351
116353
116357
116358
116360
116362
116363
116364
119331
119334
119341
119343
119348
119352
• The Stellenbosch University 2-year Diploma in Public Accountability

NQF Level 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 5 5 5 5 5 5 5 adheres to the NQF-6 qualification requirement and if the 1-year
Credits 10 11 12 15 10 10 15 10 15 8 12 12 8 15 8 8 11 12 8 12 12 15 15 12 15 12 Advanced Diploma in Public Accountability is then followed subsequent to
AO X X X X X X X X X X X X X X X X X X the Diploma, the NQF-7 qualification requirement is fulfilled
CFO X X X X X X X X X X X X X X X X X X X X
Senior Mng X X X X X X X X X X X X X X X
MidFin Mng X X X X X X X X X X X X X X X
SCM Head X X X X X X X X X X X X X X X X
SCM Mng X X X X X X X X X X
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BACKGROUND BACKGROUND
REQUIREMENTS REGARDING QUALIFICATIONS REQUIREMENTS REGARDING QUALIFICATIONS
• All Unit Standards of the MMC covered in the Diploma in Public • The remaining outcomes of the second year are aligned with that of the
Accountability and are accredited by both the LGSeta and HEQC Competent Level of Qualifications as well as Knowledge and Expertise as
• Applicants that have successfully completed an MMC training programme defined in “Annexure B, Local Government Senior Management
may be considered for credit for up to 50 percent of study towards the Framework” of the “Local Government: Regulations on Appointment &
Diploma provided that learning notional hours and controlled individual Conditions of Employment of Senior Managers” (RSA, Government
assessments were done Gazette 36223, 2013)
• Second year outcomes are also aligned with the Public Service Senior
Management Services (SMS) Competencies
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MMC PROGRAMME-US 119334- CONTACT ASSESSMENT- TEST

ASSIGNMENT
BASED ON CASE STUDIES/QUESTIONS AT THE END OF EACH UNIT/CHAPTER
• Please consult the SPL short course website: • Test learner’s understanding of:
• https://splshortcourses.co.za/available-courses/mmc-courses • Co-operative government
AND • Contracts – the types, the establishment and breaches
• Download the Assessment Plan to view the assignment that is under US • Roles and Responsibilities of Government
119334. • Principles of Intergovernmental relations
• Forms of Breach of Contract and related remedies
• Cost Management.
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Outcomes: US 119334 US119334 - Assessment Plan:

Assignment
• OUTCOME 1: Demonstrate an understanding of and interpret the South African constitution in relation to public sector financial
management • Critically analyse the IDP, Annual Report, MFMA Checklist and other relevant
• OUTCOME 2: Identify and apply the regulations governing Division of Revenue documentation of the Buffalo City (East London) Metropolitan Municipality
• OUTCOME 3: Demonstrate knowledge of and apply the South African legal system within the public sector financial management and discuss the progress made in the municipality with the implementation of
and administration context the Local Government: Municipal Financial Management Act, 2003 (MFMA)
• OUTCOME 4: Apply legislative regulations and legal principles to contracts with reference to:
• OUTCOME 5: Manage the implementation of the Municipal Finance Management Act in a municipality
The learner must demonstrate an understanding of: 1) The level of compliance achieved by the municipality.
• Local Government: Municipal Finance Management Act
• Public Finance Management Act 2) Recommendations to the Accounting Officer/Chief Financial Officer on
• Division of Revenue Act possible further improvements in the implementation of the MFMA and/or
•
•
A comprehensive understanding of legislation, rules and statutory requirements applicable to the public sector
A comprehensive understanding of all legal documents and records
the reporting processes in the Municipality.
• A comprehensive understanding of different types of contracts that apply to public financial management and administration 3) Any recommendations, in the light of your answers and responses above,
• Terms and conditions of general employment contracts
that you would consider relevant to the policies and procedures in your
• A good understanding of the South African legal system
• A good understanding of the Constitution of the Republic of South Africa.
municipality.
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Emphasis in this Unit Standard:

Chapter 1
1. Public sector
2. Intergovernmental relations
UNIT 1 3. Constitution
South Africa’s Constitution and the 4. Financial management
public sector financial management
5. Corporate governance
6. Government relations
7. Public Sector Financial Management
10-11
10
11 12
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The components of South African The sources of South African law

law
The South African
Legal System
Western component Indigenous component Universal component

Legislation 1996 Constitution
Distinction between original and sub-ordinate
Indigenous African law Human rights law

Common law Judicial precedents
Roman- English Custom or unwritten law
Dutch law Indigenous law or Customary law (Court Decisions)
Common
law
law
67
13 14
The Constitution of the Republic Elements of the Constitution of

of South Africa 1996
• The Constitution prescribes central themes/elements that inform
Rights & Obligations government relations in public financial management.
• Chapter 3 ,Section 41 highlights that the 3 spheres of Government are
distinctive, interrelated and interdependent.
• Each sphere has its specific core competencies of original authority.
The Bill of Rights
• Municipalities are constitutionally autonomous.
The Chapters and the Sections ……

12
15 16
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Elements of the Constitution of Regulatory mechanisms relating to public sector

financial management
1996
• All spheres of government require finances to carry out their duties.
• In the Public Sector the demands usually exceed the available financial resources to satisfy the needs of
Distinctiveness the communities.
• Requires regulatory measures of ensuring effective governance of financial resources
Means that each sphere of government has its own unique area of operation.
Interrelatedness • Constitution of the Republic of South Africa, 1996
Means that there should be a system of co-operate governance and
intergovernmental relations among the three spheres of government. System of • Intergovernmental Fiscal Relations Act, 1997
co-operative government ensure the decentralization of service delivery.
• Local Government: Municipal Finance Management Act, 2003
Interdependent
Means that the three spheres of government are required to co-operate and • Division of Revenue Act (annual)
support each other.
12 • Borrowing Powers of Provincial Government Act, 1996 16
17 18
Public Finance Management Act, 1999 Intergovernmental fiscal relations
Objects of the PFMA is to:

• Regulate financial management in the national government and provincial
governments;
• Ensure that all revenue expenditure, assets and liabilities of these
governments are managed efficiently and effectively; and
• Provide for the responsibilities of persons entrusted with financial
management in these governments
The Act aims to secure transparency, accountability, and sound
management of the revenue, expenditure, assets and liabilities of the
public sector
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Skills for public sector officials as per the Regulations for Management Competencies
Municipal Competency levels as Amended
• The Regulations for Municipal Competency Levels in terms of the MFMA,

2003 as amended sets out the minimum competencies required for municipal
officials
• Strategic leadership and management Competence
• Strategic financial management
• Operational financial management
• Financial performance and reporting
• Legislation, policy and implementation
• Stakeholder relations Knowledge Skills Attitude
• Risk and change management, etc.
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Regulations underlying intergovernmental Regulations underlying intergovernmental

relations and corporate governance relations and corporate governance
Are essential :
• Constitution of the Republic of South Africa, 1996 • To promote and facilitate co-operative decision-making;
• To co-ordinate and align priorities, budgets, policies and activities across
interrelated functions and sectors;
• Local Government: Municipal Finance Management Act, 2003 • To ensure a smooth flow of information within government and communities
with a view to enhance the implementation of policy and programmes; and
• Local Government: Municipal Systems Act, 2000 • To prevent and resolve intergovernmental conflicts and disputes.
• The intergovernmental relations and corporate government are informed by
the 1996 Constitution, national legislation, government policies, regulations
• Intergovernmental Relations Framework Act, 2005 and reports.
25-29 29-30
23 24
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Intergovernmental Relations Framework Specific regulations, reports and policy on

Act, 2005 IGR
Object of Act is to:
• White Paper on Local Government, 1998
• Provide a framework for intergovernmental relations within the principles
of co-operative government set out in Chapter 3 of the Constitution.
• King Reports on corporate Governance
• Provide a framework for the national government, provincial governments • (1994, 2002, 2009)
and local authorities
• Facilitate co-ordination in the implementation of policy and legislation • National Development Plan
including coherent government, effective provision of services,
monitoring, implementation of policy and legislation and realisation of • Provincial Growth and Development Strategy
national policies
• Integrated Development Plan
28-29 29-35
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King Report IDP AS PLANNING TOOL

Good Governance is marked by following governance principles:
• IDP –process through which a Municipality prepares a framework for
• Discipline - a commitment to behaviour that is universally recognised and integrated development planning for a five-year period.
accepted as correct and proper. • A key tool to cope with new developmental role.
Transparency - the ease with which an outsider is able to analyse a
company's actions. • Framework of the IDP must at least identify plans and planning
requirements that are binding on the municipality.
Independence - the mechanisms to avoid or manage conflict.
Accountability - the existence of mechanisms to ensure accountability.
Responsibility - processes that allow for corrective action and acting
responsibly towards all stakeholders.
Fairness - balancing competing interests.
Social Responsibility - being aware of and responding to social issues. 31-32
34-35
27 28
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Principles governing intergovernmental Principles underlying corporate governance in

relations the context of the public sector:
• As part of Constitutional mandate, the Financial and Fiscal Commission published a Section 41 of the Constitution articulates the following principles, which are
Framework Document which outlines the principles for IGR in South Africa in 1995 central to the concept of co-operative government that all spheres of
government and all organs of state within each sphere must:
• The effective use of resources;
• preserve the peace, national unity and the individuality of the Republic;
• Transparency;
• secure the well being of the people of the Republic;
• Accountability;
• provide effective, transparent, accountable and coherent government for the
• Nation Building & fiscal autonomy; Republic as a whole;
• Development • be loyal to the Constitution, Republic and its people;
• Equity, • respect the Constitutional status, institutions, powers and functions of the
• Macro-economic management; other spheres;
• Loan financing; • not assume any power or function except those conferred on it in terms of the
Constitution;
• Transition and resolving competing norms. 35-38 38-42
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Principles underlying Corporate

Governance -Continue
• execute its powers and perform its functions in a manner that does not
encroach on the geographical, functional or institutional integrity of
government in another sphere;
• co-operate with the other spheres of government in mutual trust and
good faith and avoid legal proceedings against the others. An organ of ACTIVITY/CLASS DISCUSSION
state involved in an intergovernmental dispute must make every
reasonable effort to settle dispute by means of mechanisms and Page 42+
procedures provided for that purpose; and
• exhaust all other remedies before it approaches a court to resolve the
dispute.
31 32
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Case Study 1
• The ABC local municipality has established the “Intergovernmental Relations Advice
Unit.” (IRAU). As a consequence of this new establishment, the ABC appointed you as
the Head of this unit. On your appointment, you discovered that the Mayor,
councillors and the entire administration component have a dim picture of how the
ABC local municipality should co-ordinate its fiscal and governance activities with both
the national and provincial spheres of government. The ABC local municipality had no UNIT 2
idea of its Constitutional and statutory obligations regarding intergovernmental The regulations governing division of
relations and co-operative government. revenue among different spheres of
government
• 7.1.1.2. As the Head of the IRAU, how will you explain to the Mayor and councillors the
autonomous status (distinctiveness) of the ABC local municipality and its activities,
which are interdependent and interrelated to the other spheres of government? In
your view, what should be the role of the ABC local municipality in addressing the
issues of intergovernmental relations? 46
33 34
Overview Overview-Allocations or Grants

Local Government Equitable Share (LGES)
Nationally generated and distributed among the 3 spheres of government.
▪ Section 216 of Constitution provides for Government to Transfer funds LG is entitled to receive equitable share grant from Nat Gov.
LGES is an unconditional Grant
as set out in the annual Division of Revenue Act. Municipal Infrastructure Grant (MIG)-Conditional Grant
Capacity building grant (CBG)
▪ National and Provincial Governments must gazette these allocations as

part of the budget implementation process.
▪ Also requires that transfers between district and local municipalities be

made transparently and reflected in the budgets of both transferring
and receiving municipalities
48 48
35 36
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Legislative Instruments used to

manage finances in local government MFMA regulations
• Constitution of the Republic of South Africa • Municipal Investment Regulations

• LG: Municipal Finance Management Act, 2003 • Municipal Supply Chain Management Regulations
• LG: Municipal Structures Act, 1998 • Municipal Regulations on Debt disclosure
• LG: Municipal Systems Act, 2000 • Municipal Budget and Reporting Regulations
• Municipal Property Rates Act, 2004 • Municipal Regulations on minimum competency levels
• Intergovernmental Fiscal Relations Act, 1997 • Municipal Asset Transfer Regulations
• Intergovernmental Relations Framework Act, 2005 • Municipal Finance Misconduct Regulations
• Division of Revenue Act (enacted annually) • Municipal Regulations on Standard Chart of Accounts
52
37 38
Intergovernmental Fiscal Relations Guidelines to resolve financial related disputes

Act, 1997 Among different spheres of Government
This law establishes a framework for the national government, provincial

governments and local government to: • Process – Page 61+
• promote and facilitate coherent intergovernmental relations; • Documents – Page 60+
• co-ordinate implementation of policy and legislation;
• provide for effective delivery of services; and
• provide for the general realisation of national priorities and monitoring of
implementation of policy and legislation.
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39 40
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The following steps sum up the guidelines The following steps sum up the guidelines-
(6.3.7) Continue
1. the parties must determine if indeed there is an intergovernmental 3.Before declaring a formal intergovernmental dispute, an organ of state must have :
dispute. In other words, the dispute must be an intergovernmental • made every reasonable effort to settle the dispute through negotiations. The
one; declaration of dispute is the end point of the informal dispute settlement stage
2. the parties must in good faith make every reasonable effort to settle a • and is an acknowledgement that the parties cannot through their own endeavour
dispute, including the initiation of direct negotiations with other party settle the dispute within a reasonable time and that they require outside assistance
or negotiations through an intermediary; to do so;
• the parties to a formal intergovernmental dispute must promptly after receipt of
the notification of a dispute convene a meeting between themselves, in case of a
failure to convene a meeting depending on the nature of dispute;
61 61-62
41 42
The following steps sum up the guidelines- The following steps sum up the guidelines-
Continue Continue
• a person designated as a facilitator must assist the parties to settle • Documents prepared for a dispute resolution process and communication
dispute in any manner necessary; cannot be referred to in subsequent legal proceedings.
• parties may approach the Minister or the MEC for local government in the • All negotiations, discussions and reports are privileged and may not be
Province and request assistance in the settlement of dispute; and as used in judicial proceedings as evidence by or against any of the parties to
highlighted above, an intergovernmental dispute.
• Section 45 of the Intergovernmental Relations Framework Act, 2005
instructs that no government or organ of state may institute judicial
• Prior to enactment of the Intergovernmental Relations Framework
proceedings unless the dispute has been declared a formal
Act,2005 intergovernmental disputes were resolved through the courts of
intergovernmental dispute and all efforts to settle the dispute have been
law.
attempted without resolution of the dispute.
62 62
43 44
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Case Study 1 7.1.1.1.

• Assuming that you are a municipal manager of the ATZ local municipality. During your office of
tenure, the ATZ municipality becomes involved in an intergovernmental dispute with the
provincial department of agriculture over the payment of electricity services rendered to it by
your municipality. Both your municipality and the relevant authorities of the Department of
Agriculture exhausted all the remedies and mechanisms to resolve the dispute but with no
success. A designated facilitator also failed to resolve a dispute. You and the authorities of the
Department of Agriculture approached the MEC and the Minister for assistance but still a
dispute was not resolved. At the end of all, you had no option but to take this matter to the
ACTIVITY/CLASS DISCUSSION competent court of law. During the court proceedings, you tendered all documents regarding
dispute resolutions to court as evidence. The Department of Agriculture argued that evidence
in question is not to be tendered in court.
Page 63
• 7.1.1.2. As the Mayor of the ATZ local municipality, do you think that the municipal manager
was legally procedural to tender evidence of intergovernmental dispute resolution to court? In
your view, what appropriate steps or measures Learner Guide: Discuss the selected legislative
regulatory framework governing the public sector management and administration
environment the ATZ municipality is required to take and how the municipal manager should
have dealt with the issue of evidence under these circumstances. 63
45 46
The sources of South African law

The South African
Legal System
UNIT 3 Legislation 1996 Constitution

South African legal system within the Distinction between original and sub-ordinate
public sector financial management

Common law Judicial precedents
and administration Custom or unwritten law
Indigenous law or Customary law (Court Decisions)
66 67
47 48
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South African legal system – Provincial government

particular structures and systems
Chapter 6 of the Constitution recognizes 9 provinces of the RSA each with its own
legislature.
• Systems of government (spheres)
The Following systems of government are important for our discourse:
❖ National government
❖ Provincial government
❖ Local government
• Structures of government (Page 74)
70 71
49 50
Local Government South African legal system – context of

public sector legislation
• Chapter 7,especially section 155 of the Constitution recognizes the local sphere of Two important broad concepts:
government ,which consist of municipalities ie: Metros, District Municipalities and
Local Municipalities. A Municipality consist of: • “South African legal system” - refers to a variety of legal sources, which directly
or indirectly influence the administration of the public sector.
• “Public sector” - refers broadly to public administration of the three spheres of
government and organs of the state.
74
72
51 52
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South African legal system – context

of public sector legislation
Public Sector is confronted with almost all aspects of the SA law.

• Constitution of the Republic of South Africa
• Legislation and common law:
❖ Promotion of Administrative Justice Act, 2000
❖ Promotion of Access to Information Act, 2000
❖ Promotion of Equality and Prevention of Unfair Discrimination Act,
2000
• Government Policy: Batho Pele
• Regulations and Codes of Conduct
75-83
53 54
Batho Pele Constitution of the Republic of

South Africa, 1996
According to the Constitution (1996), the objectives of local government are to:
• Consultation
• Service standards • provide democratic and accountable government for local communities;
• ensure the provision of services to communities in a sustainable manner;
• Access
• promote social and economic development;
• Courtesy • promote a safe and healthy environment; and
• Information • encourage the involvement of communities and community organisations in the
matters of local government (RSA, 1996).
• Openness and transparency
• Redress
• Value for money
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ACTIVITY/CLASS DISCUSSION
Page 84
75-76
57 58
Case Study 1
• On the 15 January 2005, Mr. Jackson Ndimande, a prominent civil engineer in the
municipal area of Ndima local municipality filed an application for a site in the
municipal office. Mr. Jackson desperately needs the site for the construction of an
engineering workshop building necessary to carry out his engineering activities.
Twelve months down the line, Mr. Jackson is still waiting. He frequented the municipal
office requesting the outcome of his application. He had since been ignored by the
DAY 2
Ndima municipal officials. He reported his frustrations and otiose delays to the
municipal manager and ward councillor without any success.
• 7.1.1.2. You are the Mayor of the Ndima local municipality, Mr. Jackson approached
you and requested your intervention in this matter. What basic values and
Constitutional principles do you think should guide the actions of the municipal
officials regarding the application of Mr. Jackson Ndimande? How will you use the
Batho Pele principles to guide your colleagues in promoting a high standard of
professional ethics?
84
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Essential elements of a valid contract
• Local Government contracts have many special features that distinguish

them from ordinary private law contracts, ie:
• Differ with regards to the policies they aim to achieve,

UNIT 4
Legislative regulations and legal • The importance from a public interest point of view,
principles as applied to contracts • Their needs for flexibility and control and
• The large amounts of money involved.
• 5 Essential elements for the establishment of a valid contract namely:

89-94
87
61 62
Essential elements of a valid contract Essential elements of a valid contract

1. Consensus
• By consensus, it means the actual meeting of minds of the contracting parties or at least the reasonable belief by one of the contracting • 3. Lawfulness or legality
parties that there is consensus .
• For a contract to be valid it must be lawful –meaning it must be legal.
• 2. Contractual capacity
• All persons in our law have legal capacity, which means that they are carriers of rights and duties.
• Contract is lawful when it has been concluded in accordance with statute or common law. A
• Distinguishes between natural persons and legal persons:
contract violates the common law if it is against public policy or morals. In other words, if it is
• Natural persons are people (Individual) and; contra bones mores. Legislation often prohibits these kinds of contracts because they are in
• Legal persons are created through a legal process such as companies, close corporations and statutory entities. conflict with public policy. Typical instances of illegality occur where the conclusion of an
• The municipalities and municipal entities are legal persons. agreement or the agreed performance of the contract for which the agreement is concluded is
• The municipal representatives require the necessary authority to act on behalf of a municipality. contrary to the law and public policy. A statute may express in clear terms that certain
• Legislation determines the extent of the contractual capacity of these representatives. agreements will be illegal if they do not comply with the statutory requirements.
89-91
91-92
63 64
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Essential elements of a valid contract Diagram: Requirements for a valid contract
• 4. Formalities
• No formalities are prescribed for the validity of a contract. Legislation has, however, created exceptions to
the general rule. The formalities imposed by the law for some contracts are the following:
• a contract must be in writing;
• a contract must be notarilly executed; and
• a contract must be registered.
• 5. Certainty and possibility of performance

• The establishment of a valid contract is that the performance agreed upon must be objectively possible when
the agreement is concluded. An agreement will therefore not be a contract and will not create obligations if
performance is initially objectively impossible. If performance is objectively impossible when the agreement
is concluded, no obligation arises in respect of that performance. Performance must therefore be certain or
reasonably ascertainable.
• Secondly, the performance itself must be possible.
93
92-93
65 66
Legal documents required to support

Forms of breach of contract
contracts
• Contract of sale of land - title deed, deed of alienation • Mora Debitoris
• Credit Agreement - ID, physical address, registration number, its audited financial statements -failure of debtor to perform on time
for preceding three financial years; its approved annual budget; the municipality’s
development plan or multi-year business plan in case of a municipal entity; and its repayment -not refusal to perform by debtor
schedule pertaining to its existing short-term and long-term debt. -Mora debitoris is simply late performance
• Contracts of suretyship - document with security • Mora Creditoris
• Contract of movable property - registration certificate –failure of creditor to accept proper performance when tendered by
• Contract of employment - the debtor
• The contract of employment should contain clauses covering inter alia: • Repudiation
• the names, ID numbers and addresses of the parties, the place of work, a job description
of the employee, the date on which employment begins, probationary period, the – may be described as the notice whether express or tacit, given by the
employee’s ordinary hours of work and overtime, medical and pension benefits and debtor that he or she will not comply or continue to comply with his obligations.
retirement age. This is denial of obligation.
94-98 100-103
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Remedies available to the aggrieved party in

Forms of breach of contract-continue the case of breach of contract
• Specific performance
• Rendering performance impossible- means that one of the parties by his or her Specific performance is claimed if an aggrieved party seeks fulfilment of the contract. If specific performance is impossible, damages can be
claimed.
act or omission has caused performance to become impossible
• Cancellation
• Positive mal-performance Cancellation is available only when a material term of contract has been breached.
• Damages
- There are two forms of positive mal-performance namely: Damages signify an amount of money to compensate the aggrieved party for financial loss suffered and profits not made as a result of the
breach of contract.
the debtor performs but his performance is inappropriate, incomplete or • Penalty clause
defective and: A penalty clause is a clause in a contract in terms of which a pre-determined amount of money becomes payable in the event of breach of
contract.
when the debtor does something, which he or she may not do in terms • Interdict
An interdict is a court order either instructing someone from acting in a certain way or compelling him or her to act in a prescribed way.
of the contract, ie: subletting when main contract prohibits it. • Exceptio non adimpleti contractus
The exceptio non adimpleti contractus is a defence which can be raised against the claimant where he or she is claiming performance without
himself or herself having performed or tendered performance.
102 102
69 70
General Employment Contract Employment contract - consensus

• A contract is an Agreement between two parties
• Consensus must be reached on work to be done and remuneration to be
• Employer and Employee must have Contractual capacity to conclude a
contract
paid
• Contract is both Judicially and physically possible after formalities reduced • Factors which tend to indicate the existence of an employment contract
into writing include the person alleging to be an employee:
• General rule is that no formalities are required for conclusion of contract of ❖ is obliged to render services personally and may not delegate this
service obligation
• Basic Conditions of Employment Act, 1997 states that employment contract ❖ has to keep fixed hours and is paid a regular wage or salary
must be in writing. ❖ is entitled to benefits such as pension fund or medical aid scheme
• Essential element of employment contract is Consensus and:
• Employees subject to a degree of Control by Employer ❖ is subject to a degree of control by the employer
104 105
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Employment – legislative framework Documents and contracts - experts

Conveyancer: Financial institutions (banks):
• Constitution of the Republic of South Africa The conveyancer most common duty is to effect The experts of the financial institution such as
transfer of immovable property from one person to consultants provide financial loans for the purchase
• Employment Equity Act, 1998 another. of a property
Estate Agent:
• Basic Conditions of Employment Act, 1997 The seller’s salesperson is an estate agent who is South African Revenue Service (SARS):
• Labour Relations Act, 1995 responsible to obtain the best possible price. The professionals of SARS provide inter alia a
Quantity surveyor: Quantity surveyor is a person who legal framework and mechanisms for the purpose of
• Skills Development Act, 1998 measures and prices building work. payment of land or property tax.
Notary:
• Occupational Health and Safety Act, 1993 Town planner:
Notary is a professional legally empowered to witness
This expert is responsible for town planning.
• Latest Staffing Regulations signatures and certify a document’s validity and to take
depositions. It is for this reason among many others,
that law insists that the document cannot be registered Public valuer:
in the Deeds Office unless it is executed before a This expert is a professional who assesses a value of
notary.
106 property
108-110
73 74
DELICTUAL LIABILITY IN CONTRAST WITH

Delictual liability - contracts CONTRACTS
• The essential characteristic of the South African law of delict is that it is
founded on general principles of liability. • The Ramane local municipality paid R80 000. 00 for the supply of meat and
• Delict is a form of unlawful conduct. In general terms, a delict can be defined as
fresh milk to 500 indigent households. The Zanziba Meat Market delivers a
a civil wrong. Delict and breach of contract are both forms of unlawful conduct rotten meat, which could not be used or consumed by the members of the
which are governed by the rules of private law. When one of the contracting earmarked indigent households. As a result, the Ramane municipality
parties decides to breach the terms of contract without a good cause, the suffered financial loss.
aggrieved party is entitled to a claim of damages. • In the present circumstances, the Ramane local municipality is entitled to
• The aggrieved party can claim damages only if he has actually suffered a loss. claim damages. The participants of the pilot training on MFMA
• For municipalities, delictual liability has far-reaching implications for the implementation believe that municipalities can avoid delictual litigation
municipalities who enter several contracts to ensure service delivery to the through contractual management. Therefore, there is a need for specific
communities. Similarly, where a municipality has suffered a financial loss due to contract management office in each municipality.
a
111-112
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Delictual Liability in Contrast with

Contracts
From Wikipedia, the free encyclopedia
• In civil law, a delict is an intentional or negligent act which gives rise to a
legal obligation between parties even though there has been no contract
between them. Due to the large number of civil law systems in the world, ACTIVITY/CLASS DISCUSSION
it is hard to state any generalities about the concept. Moreover in some
civil law countries (e.g.: Italy, Spain) delicts are most serious crimes, Page 113+
similar to felonies in common law countries, whereas in other states (e.g.:
France, Belgium, Switzerland, Denmark), they are crimes of intermediate
seriousness (less serious than those termed crimes).
77 78
“We are a nation of talkers‚ not doers;
UNIT 5 of politicians‚ not entrepreneurs.

The implementation of the Local We analyse problems brilliantly; we solve them poorly.
Government: Municipal Financial We are a nation of great policies‚ but of little implementation.”
Management Act, 2003 in a
Justice Malala
municipality
117
79 80
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The MFMA within a broader milieu

Political implications
• The MFMA, 2003 has changed, improved and fine-tuned the roles of appointed and elected officials. The Act has put in place a sound financial
governance framework by clarifying and separating the roles and responsibilities of the Council, the Mayor and officials. Mayors are the political
heads of municipalities while municipal managers are the administrative heads and accounting officers of Councils. Speakers of Councils are in charge
of the conduct of all councillors in the Council, including the conduct of the political head of Council, the Mayor. The MFMA, 2003 requires councillors
to operate at a political and at policy level while appointed officials are required to implement the policies at an administrative level.
Social and economic implications
• Municipal Finance Management Act, 2003 is squarely premised on the ethos and values of the Constitution.
• the Constitution states that local government must ensure the provision of services to promote social and economic development.
• municipality must strive within its financial and administrative capacity to achieve its social and economic objectives.
• sections 77, 80 and 84 requires a municipality to structure and manage its administration, budgeting and planning processes to give priority to
the basic needs of the community and to promote social and economic development of the country
Legal implications – liability extends to:
❖ Municipal Managers
❖ Councillors
❖ Municipal officials
❖ Mayors
❖ Directors of municipal entities
119-122
81 82
Functions and responsibilities The Mayor
• must study all reports and if he or she has any suspicions or concerns over
• Municipal Council financial accountability, transparency or other issues, he or she must take the
following steps:
• Mayor 1. respond to the problem promptly;
• Municipal Manager 2. initiate any remedial steps;
3. reduce spending; and
• Chief Financial Officer 4. alert Council and the relevant MEC to the problem.
• Other officials of Municipality
• Councillors and Ward Committees
• Local community
123-129
83 84
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In preparing the municipality’s budget in terms The Municipal Manager

of section 53 of the MFMA the Mayor
1. provide political guidance; • The municipal manager is responsible for forming and developing an
2. provide leadership and control over a municipal entity; economical, effective, efficient and accountable administration.
3. co-ordinate the process for preparing the annual budget, the Integrated • The Municipal Finance Management Act, 2003 especially sections 94-
Development Plan that accompanies it; and 100 sets out the municipal manager’s role in the budget process.
4. consult with any other relevant stakeholders. This could include
consultation with other municipalities, the provincial and national
treasuries and government departments that have responsibility to
provide basic services such as water, electricity and sanitation.
85 86
The Municipal Manager-continue Ward committees (WC)
He or she must also act as the accounting officer to: WC can influence the fiscal and financial management of the municipalities
1. assist the Mayor by providing administrative support, resources and the by:
information necessary to prepare a budget; • engaging the Council in budgetary process;
2. implement the budget once it has been approved. This include monitoring
• attending Council meetings where budget issues are to be discussed;
the revenue and expenditure;
• disseminating information to community members about how the
3. report to the Council about any shortfalls or any overspending or overdrafts;
municipality plans to spend its budget;
4. provide the Mayor with monthly budget statements not later than 10 days
after the end of each month; and • monitoring corruption in Council; and
5. conduct half-yearly assessment of the municipality’s finances and make • safeguarding the assets of the municipality.
6. recommendations for adjustments to the budget if necessary.
87 88
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Financial management processes to ensure

sustainable management of municipality's Project Management principles
development objectives
The implementation of the MFMA is driven by cost, time schedule, performance and a municipality’s responsibilities. There is no
single principle, which can lead to the successful implementation of the MFMA. Combination of these principles is crucial.
• Revenue adequacy and certainty Implementation of MFMA establishes the systems of good financial governance.
• Effective and efficient resource use • Municipality must define Scope and initiation management
• A municipality must define the scope of the implementation of the MFMA. In other words, the deliverables
• Accountability, transparency and good governance must be divided into smaller and more manageable components.
• Accounting and financial reporting procedures • Time management
• This phase must include processes required to ensure timely completion of the implementation of the MFMA
• Budget strategic focus
• Cost management
• Services provided at levels • A municipality must ensure that the implementation of the MFMA is completed within the approved budge t.
• Clear and focused integrated development plan • Cost management consists of:
• Resource planning;
• Strategies for supply chain management • Cost estimation;
• Officials should ensure financial resources administered responsibly • Cost budgeting;
• Cost control; and
• Code of Conduct … • Cost constraints
133-139
129-133
89 90
Project Management principles

Quality management
The quality management include the processes required to ensure that the implementation of the MFMA
will satisfy the needs for which it was undertaken. It includes:
Quality planning-municipality must identify which quality standards are relevant to the implementation
of the MFMA.
Quality control-municipality is expected to monitor specific results to determine if they comply with
relevant quality standards
Communication management
ACTIVITY/CLASS DISCUSSION
The starting point of this stage is to ensure that information needed for the implementation of the MFMA
is distributed and made available to all stakeholders namely, municipal officials, councillors, political heads
of a municipality and residents
Page 139+
Delivery process
This stage involves the closing process. This means a formal acceptance of the implementation phase and
bringing it to an orderly end.
It must be emphasized that since the implementation of the MFMA involves various learning activities, it cannot be safely concluded that the implementation
can reach finality.
91 92
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EXECUTIVE SUMMARY OF MFMA Chapter Summary

Chapter summary
Chapter 1 provides definitions of the terms and concepts used in the Act. It • Chapter 3 sets out the framework for municipal bank accounts and cash,
outlines the scope of the legislation and to whom it applies and it investment and asset management. It deals with the opening and control
determines the conditions under which amendments to the legislation may of bank accounts by municipalities, it grants power to the National
be made. Treasury to prescribe a framework for cash management and
management of investments and it establishes certain parameters around
the disposal of capital assets.
Chapter 2 deals with the powers of the National Treasury and all provincial
treasuries with regard to local government finances and fiscal powers. It
allows the Minister to delegate the powers of the National Treasury to
national or provincial departments.
93 94
Chapter Summary Chapter Summary
• Chapter 4 determines the budget process for municipalities, over a three- • Chapter 5 deals with co-operative government. It requires national and
year budgeting framework. It standardizes the format of budget provincial government to assist local government in building its financial
documentation and links the budget to other related policy and planning management capacity. It outlines the process whereby national and
processes. It modernizes the budget process, allowing for a system of provincial government is required to make three-year budgeted grant
votes on expenditure, a capital and an operating budget and a allocations to municipalities to enable those municipalities to prepare
consultative process of hearings after the tabling of the budget. Councils their three-year budgets. The chapter also discusses the stopping of funds
are made ultimately responsible for approving budgets, within a local by national or provincial governments under certain circumstances,
government financial management framework. monitoring of prices for bulk resources and disputes between different
spheres of government.
95 96
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Chapter 6 deals with the borrowing of money by municipalities, both long-term

and short-term. It discusses certain conditions on borrowing and issues of Chapter 9 requires that municipalities establish a budget and treasury
security, disclosure and municipal guarantees. office, under the control of a chief financial officer accountable to the
municipal manager. It outlines the responsibilities of the chief financial
officer and provides for delegations and minimum competency levels for
Chapter 7 outlines the role and responsibilities of the mayor, representing the officials with any financial management responsibility.
executive authority of the council. Issues relating to the roles and responsibilities
of the mayor are discussed in detail in Chapter 5 of this guide.
Chapter 10 establishes the financial governance framework for municipal
entities. It establishes the chief executive officer as the accounting officer
Chapter 8 outlines the role and responsibilities of municipal officials,
representing the administrative authority of the council. Issues relating to the
responsible to the board of directors and sets out the powers and functions
roles and responsibilities of municipal officials are discussed in detail in Chapter 5 of that officer. It also discusses roles and responsibilities of the council and
of this guide. the municipal manager in regard to an entity.
97 98
Chapter 11 deals with the procurement of goods and services by a Chapter 13 deals with the resolution of financial problems. It attempts to ensure
municipality and municipal entity. It discusses the supply chain that effective action is taken early by the municipality when financial problems
are identified. Should the municipality be unable to resolve the problem itself, it
management policy and process, as well as public –private partnerships, may seek the assistance of the province.
ensuring that the framework for these processes is fair, equitable,
The Chapter gives effect to section 139 of the Constitution, which now provides
transparent, competitive and cost-effective. for three types of provincial intervention. The chapter provides for the
management and termination of a financial recovery plan and for municipalities
to seek temporary or extraordinary relief from their financial obligations by
Chapter 12 outlines requirements and procedures for the preparation, application to the High Court.
adoption and auditing of the annual financial statements of both The Chapter deals with the establishment of the Municipal Financial Recovery
municipalities and municipal entities. It details disclosure requirements and Service, its functions and powers and the appointment of its head and other
describes the consequences of non-compliance with certain provisions. officials.
99 100
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Chapter 14 deals with a number of general treasury matters, including the Chapter 15 is concerned with financial misconduct within municipalities
assignment of powers to the Minister to make regulations or issue and municipal entities. It also provides for a legal regime for disciplinary
instructions or guidelines relevant to the Act or municipal financial proceedings and empowers the Minister to make regulations prescribing
management in general. procedures in this regard.
Provisions are also set for the creation of internal audit units and audit
committees and in relation to forbidden activities of council and Chapter 16 provides for miscellaneous aspects. It limits liability in respect
remuneration and benefits that may be paid to political office-bearers. of anything done in good faith in terms of the legislation and allows the
Minister to exempt municipalities and municipal entities from specific
provisions of the legislation.
101 102
The world (municipalities) we have

created is a product of our thinking, it
Thank you  Dankie Enkosi
cannot be changed without changing
our thinking.
No problem can be solved with the
same consciousness that created it.
We must learn to see the world
(municipalities) a new.
Good Luck with exam and assignment preparations

103 104
26

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Municipal Minimum Competency Training BACKGROUND

P84 West Coast District

26 US ID’s: REQUIREMENTS REGARDING QUALIFICATIONS

• The Stellenbosch University 2-year Diploma in Public Accountability

MMC PROGRAMME-US 119334- CONTACT ASSESSMENT- TEST

Outcomes: US 119334 US119334 - Assessment Plan:

Emphasis in this Unit Standard:

The components of South African The sources of South African law

Western component Indigenous component Universal component

Indigenous African law Human rights law

The Constitution of the Republic Elements of the Constitution of

The Chapters and the Sections ……

Elements of the Constitution of Regulatory mechanisms relating to public sector

Public Finance Management Act, 1999 Intergovernmental fiscal relations

Objects of the PFMA is to:

• The Regulations for Municipal Competency Levels in terms of the MFMA,

Regulations underlying intergovernmental Regulations underlying intergovernmental

Intergovernmental Relations Framework Specific regulations, reports and policy on

King Report IDP AS PLANNING TOOL

Principles governing intergovernmental Principles underlying corporate governance in

Principles underlying Corporate

Overview Overview-Allocations or Grants

▪ National and Provincial Governments must gazette these allocations as

▪ Also requires that transfers between district and local municipalities be

Legislative Instruments used to

• Constitution of the Republic of South Africa • Municipal Investment Regulations

Intergovernmental Fiscal Relations Guidelines to resolve financial related disputes

This law establishes a framework for the national government, provincial

Case Study 1 7.1.1.1.

The sources of South African law

UNIT 3 Legislation 1996 Constitution

public sector financial management

South African legal system – Provincial government

Local Government South African legal system – context of

South African legal system – context

Public Sector is confronted with almost all aspects of the SA law.

Batho Pele Constitution of the Republic of

Essential elements of a valid contract

• Local Government contracts have many special features that distinguish

• Differ with regards to the policies they aim to achieve,

• 5 Essential elements for the establishment of a valid contract namely:

Essential elements of a valid contract Essential elements of a valid contract

Essential elements of a valid contract Diagram: Requirements for a valid contract

• 5. Certainty and possibility of performance

Legal documents required to support

Remedies available to the aggrieved party in

General Employment Contract Employment contract - consensus

Employment – legislative framework Documents and contracts - experts

DELICTUAL LIABILITY IN CONTRAST WITH

Delictual Liability in Contrast with

“We are a nation of talkers‚ not doers;

UNIT 5 of politicians‚ not entrepreneurs.

The MFMA within a broader milieu

Functions and responsibilities The Mayor

In preparing the municipality’s budget in terms The Municipal Manager

The Municipal Manager-continue Ward committees (WC)

Financial management processes to ensure

Project Management principles

EXECUTIVE SUMMARY OF MFMA Chapter Summary

Chapter Summary Chapter Summary

Chapter Summary Chapter Summary

Chapter 6 deals with the borrowing of money by municipalities, both long-term

Chapter Summary Chapter Summary