Pietermaritzburg - MPLs and top local government officials here have roundly praised the Municipal Finance Management Act as a major tool for bringing stability in the finances of municipalities.
 
Due for implementation next July, the Act introduced in Parliament by Finance Minister Trevor Manuel, outlines an arsenal of measures aimed at bringing about financial stability and accountability to the local sphere of governance.
 
Provincial politicians and top government officials yesterday expressed hope that the measures contained in this Act would go a long way towards giving financial capacity to several provincial municipalities which are in financial tatters.
 
Recent reports have indicated that just more than half of provincial municipalities lacked the financial know-how.
 
In a recent scathing report by the KwaZulu-Natal auditor-general Barry Wheeler, severe financial weaknesses were identified in at least 37 of 61 provincial municipalities.
 
These, according to Mr Wheeler, had failed to submit their financial statements, as required by law, to his office.
 
The law sets a number of monitoring mechanisms by both provincial treasuries and the provincial local government MECs.
 
Briefing the Local Government Portfolio Committee members, Dr Warwick Dorning, Manager of Municipal Finance at KwaZulu-Natal Treasury, said the law sought to promote sound financial governance by clarifying the roles and responsibility of key role-players in the municipalities.
 
These are mayors, executive committee members who are tasked to provide political leadership and policy formulation while ordinary councilors' tasks are to monitor and provide oversight role like the parliamentarians to cabinet ministers.
 
It introduces budget reforms such as forward looking budgeting with strategic focus, improved integration of budgeting and planning processes.
 
Also provincial treasuries and MECs for local government have been tasked to assist municipalities with their budgeting.
 
The minister of finance and the head of treasury are also empowered to take "appropriate steps" if a municipality in a province commits a breach of the act.
 
Also in the event of major financial breaches, a local government MEC is empowered to intervene.
 
It also contains punitive measures for municipal officials, like accounting officers, which carry a penalty of imprisonment or a fine.
 
For instance if an accounting officer deliberately fails to take reasonable steps to prevent unauthorised or fruitless expenditure he or she could be imprisoned for a period not exceeding five years or pay an appropriate fine determined in terms of the act.
 
Both the Acting Head of Local Government, John Johnston and Dr Dorning expressed hope the act would go a long way towards bringing stability at this sphere of government.
 
"The whole objective is to improve financial processes across the board in the local government spheres.
 
"It also modernises financial management, improves systems, improves monitoring and reporting system with regards to municipal finances," said Dr Dorning.
 
He said he had no doubt that when all the provisions of the act were fully implemented by all municipalities it would certainly lead to greater stability.