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No Free Lunches As Rules Rein In Municipal Spending

The Witness

10 Jun 2019

FROM July 1, municipalities will be allowed to spend a maximum of R700 000 on any car meant for the use of its political office-bearers — or less for mayors that do not earn at least R1 million per year.

Cars will have to do at least 120 000 kilometres before being replaced, unless they suffer “a serious mechanical problem” and are in poor condition, and only with a report saying so from the dealer.

But municipalities may not simply spend that maximum amount. Unless they can get a car cheaper, they must buy one via a national government deal for cars, and then only after making sure it wouldn’t be cheaper to rent a car — only after the council has been informed of the extent of service delivery backlogs.

Failure to do any of those things could see officials held liable for financial misconduct, with the chance of criminal sanction or being made to personally repay the money.

The detailed rules on cars — and consultants, credit cards, travel expenses, catering, and newspaper subscriptions — were formally gazetted on Friday after more than a year in draft form.

The rules, known as the Municipal Cost Containment Regulations 2019, will be in force until replaced, and as there are no provisions for increases in line with inflation, they will gradually squeeze ever further the ability of local governments to spend money on cars and entertainment, where limits are set in hard rand values. Other notable rules that come into effect on July 1 include:

  • limits on the use of consultants, with requirements that their work be closely monitored;
  • a requirement that international travel to meetings and events be limited to “critical” events, and only for officials directly involved in the subject matter;
  • a requirement that officials use public transport when travelling, unless hiring a car will be cheaper;
  • a ban on overnight accommodation for any travel less than 250 km away;
  • a total ban on official credit cards; a total ban on catering for meetings attended only by people employed by the municipality without written permission; a limit of R2 000 per year on entertainment allowances for officials;
  • a limit on spending for farewell functions to the amount of petty cash allowed — and then only for officials who have either been with the municipality for at least 10 years or are retiring because of ill health;
  • newspaper subscriptions must be allowed to lapse, and may be replaced only if electronic subscriptions are not available and the publication is required for “professional purposes”.

Although no guidance is provided on what would constitute too fancy a desk or chair, municipalities are also enjoined to “avoid expenditure on elaborate and expensive office furniture”.