How do municipal ward budgets work?

The local government elections took place on November 1. Once the results were out, the political parties had to negotiate coalitions for control of council. Once elected, mayors and ward councillors are due to start working for their respective areas. This means they will be in charge of budgets to improve services for residents. The Daily Vox team decided to take a closer look at how municipal budgets work. 


What do mayors and councillors earn?

Where do ward budgets come from? 

The Local Government: Municipal Finance Management Act of 2003 (the MFMA) regulates municipal budgets. Every local municipality in South Africa must prepare and publish their own annual budget. The budget must set out projected revenue and expenses. It must also show what the income and expenses will be over the coming financial year. 

Municipal budgets are spread over three years, and financial years begin on July 1. A financial year is not a typical calendar year. It refers to a 12 months period government and other organisations use to calculate their finances. The budget has an operating budget and a capital budget. The operating budget covers the day-to-day running of the municipality. The capital budget covers expenses like  water, sanitation,and roads.  

Who decides the ward budget? 

A municipal manager is a municipality’s accounting officer and is responsible for managing its finances. The mayor and manager are directly responsible for creating the annual budget. Municipalities in South Africa are run by councils with a mayor as the head. The budget is then passed by a full council. They control all expenditure of their municipality. Ward councillors provide guidance and oversee budget implementation. They evaluate the quarterly budget implementation reports the mayor submits to the council. They are not involved in the day-to-day operational spending. 

Ward councillors can influence spending within the budget by participating in the annual review of the Integrated Development Plan (IDP). The IDP is the municipality’s strategic plan that must match the budget. This is governed by the Local Government Municipal Systems Act, 2000 (Act 32 of 2000)

Every municipal council after election must adopt one strategic plan for municipal development. It links municipal resources with development plans and implements them. The IDP gives a framework for coordinating and improving the quality of life of people living in an area. It covers the economic and social development of the area with its existing conditions and available resources. 

Public Participation in municipal budgets

The Municipal Systems Act also requires municipalities to involve communities in decision-making processes. They have to consult and cooperate with the community’s concerns and needs. Communities are empowered to submit their recommendations and complaints to the council. They are also to be informed of council decisions and to attend open meetings.The act also requires accessibility of information to all people. There are specific processes, which require the public to take part. These are participating in drafting of municipal laws and IDP’s. They can also participate in the compiling of the budget. 


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The process of ward project funding

Sub councils are made up of three to six neighbouring wards within a city. They exist to ensure that issues neighbourhoods are dealing with get heard. A sub council is allocated a budget per ward. After community participation, ward committees present projects to the sub council. They then review and submit to the council for approval. The council’s decisions stray toward a community’s greatest need. As an individual you can petition your ward committee, ward councillor and subcouncil manager for a ward project

Grants-in-Aid Policy

The MFMA empowers a municipality to donate funds(grants in aid) to organisations outside of government.  Non-profit, welfare or voluntary organisations are qualifying ones for aid. The projects that are funded must benefit the community and assist in realising the municipality’s IDP objectives. The application process is rigorous and requires organisations to be registered on national and local supplier databases. Proposals must be detailed and outline budgets and the creation of job opportunities. The aid covers education, welfare,sport, arts, culture and local economic development. Each municipality has different criteria and you should consult your ward councillor/committee for guidance. 

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