Treasury pulls plug on big spending

2013-03-17 10:00

Circular released in terms of Municipal Finance Management Act puts an end to frivolous, wasteful expenditure.

Feel like hosting a music festival, organising a beauty pageant or using public money to buy booze? Forget about it – if you’re working in a municipality, that is.

A Treasury circular seen by City Press has also put the brakes on over-the-top catering for meetings and paying golden handshakes to officials, dismissing these as “nice-to-haves” with no impact on service delivery.

According to the circular released in terms of the Municipal Finance Management Act, local councils have been ordered to control unnecessary spending on “non-essential activities”.

Also off the shopping list are “luxurious office?accommodation and furnishings”, and lavish foreign travel by mayors, councillors and officials who pass these off as “study tours”.

Treasury has warned such frivolous spending “could be classified as fruitless and wasteful” and officials could therefore be disciplined if they waste money this way.

In the circular, dated December 11 last year and sent to each of the country’s 278 municipalities, Treasury also pleads with them to step up efforts to combat waste, inefficiency and corruption.

“Municipalities are advised to halt this bad practice immediately and are reminded of the need for resource allocation to be prioritised in expanding public-sector investment, considering the challenging economic landscape,” it says.

Treasury also says council-sponsored celebrations, gala dinners, commemorations, advertising and voter-education campaigns are just public relations projects not related to actual service delivery, and should be stopped.

Last year, the Metsimaholo Local Municipality in Sasolburg, Free State, blew more than R100?000 on T-shirts, DVDs and a music system for a memorial lecture in honour of murdered councillor Ntai Mokoena.

In 2011, Metsimaholo wasted R35?000 by booking a gospel star, Lundi, to perform, but he never arrived.

No comment had been received from Metsimaholo at the time of going to press.

Meanwhile in Mpumalanga, Mbombela municipality officials sent a 25-member delegation on a “benchmarking” exercise to Johannesburg last October. They stayed at the upmarket Rosebank Crown Plaza hotel for three nights at a cost of R1?800 per person per night.

At the time, the municipality was in financial trouble and applying for a R60?million loan.

It appears that Treasury is working furiously to plug leaks in the public purse.

Another circular issued this week orders municipalities to have cellphone and data policies in place by July.

“It has to come to our attention that there are efficiency leakages in the way municipalities manage costs associated with cellphones and mobile data (3G).

“National Treasury has come across instances where municipalities are spending tens of thousands on individual contracts per month,” this week’s circular says.

The SA Local Government Association’s chief of operations, Lance Joel, told City Press that Treasury had?not consulted the organisation about its circulars.

Asked for his response to the new guidelines, Joel said that municipalities’ expenditure was “guided by appropriate legislation”.

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