Division of Revenue Act, 2011 (Act No. 6 of 2011)Chapter 5 : Duties of Municipalities, Provincial Treasuries and National Treasury28. Duties of municipalities |
| 1) |
| a) | In addition to the requirements of the Municipal Finance Management Act, the accounting officer of a category C municipality must, no later than 14 days after this Act takes effect, submit to the National Treasury and all category B municipalities within that municipality’s area of jurisdiction, the budget, as tabled in accordance with section 16 of the Municipal Finance Management Act, for the 2011/12 municipal financial year, and the two following municipal financial years. |
| b) | The budget must indicate all allocations from its equitable share and conditional allocations to be transferred to each category B municipality within the category C municipality’s area of jurisdiction and disclose the criteria for allocating funds between the category B municipalities. |
| 2) | A category C municipality that is providing a municipal service must, before implementing any capital project for water, electricity, roads or any other municipal service, consult the category B municipalities within whose area of jurisdiction the project will be implemented, and agree in writing which municipality is responsible for the operational costs and the collection of user fees. |
| 3) | A category C municipality must ensure that it does not duplicate a function currently performed by a category B municipality and must transfer funds for the provision of services, including basic services, to the relevant category B municipality that is providing municipal services, irrespective of the fact that— |
| a) | the category C municipality retains the power or function in terms of the Municipal Structures Act; and |
| b) | a service delivery agreement for the provision of services by the category B municipality on behalf of the category C municipality has not been concluded. |
| 4) | A category B municipality which is not authorised to perform a function in terms of the Municipal Structures Act may not extend the scope or type of services that it currently provides, without— |
| a) | entering into a service delivery agreement with the category C municipality which is authorised to perform the function in terms of the Municipal Structures Act; or |
| b) | obtaining the legal authorisation to perform the function in terms of the Municipal Structures Act. |
| 5) |
| a) | A category C municipality and a category B municipality must, before the commencement of a municipal financial year, agree to a payment schedule in respect of the allocations referred to in subsection (1)(b) to be transferred to the category B municipality in that financial year, and the category C municipality must submit that payment schedule to the National Treasury before the commencement of a municipal financial year. |
| b) | A category C municipality must make transfers in accordance with the payment schedule submitted in terms of paragraph (a). |
| 6) |
| a) | The National Treasury may withhold or stop any allocation to the category C municipality and reallocate the allocation to the relevant category B municipalities if a category C municipality fails to— |
| i) | make allocations referred to in subsection (1)(b); |
| ii) | reach an agreement contemplated in subsection (2); or |
| iii) | submit a payment schedule in accordance with subsection (5)(a). |
| b) | Sections 16(3) and 17(3) and (4) of this Act and section 216 of the Constitution apply, with the necessary changes, to the withholding and stopping of an allocation in accordance with paragraph (a). |
| c) | The National Treasury may, where it stops an allocation in terms of this section, after consultation with the transferring national officer, determine that a portion of the allocation that will not be spent be reallocated to one or more municipalities, on condition that the allocation will be spent in the financial year or the next financial year. |
| 7) | A municipality must ensure that any allocation made to it in terms of this Act, or by a province or another municipality, that is not reflected in its budget as tabled in accordance with section 16 of the Municipal Finance Management Act, is reflected in its budget to be considered for approval in accordance with section 24 of the Municipal Finance Management Act. |
| 8) | In respect of the Human Settlements Development Grant, the financial and non-financial reporting that is required to be submitted by a municipality with a level three accreditation in terms of the grant framework must relate to the requirements specified in the grant framework. |
| 9) | A municipality with a level three accreditation must submit the required monthly financial and quarterly performance reports to the receiving officer, the transferring national officer and the National Treasury. |