Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)Chapter 4 : Municipal Budgets32. Unauthorised, irregular or fruitless and wasteful expenditure |
| (1) | Without limiting liability in terms of the common law or other legislation— |
| (a) | a political office-bearer of a municipality is liable for unauthorised expenditure if that office-bearer knowingly or after having been advised by the accounting officer of the municipality that the expenditure is likely to result in unauthorised expenditure, instructed an official of the municipality to incur the expenditure; |
| (b) | the accounting officer is liable for unauthorised expenditure deliberately or negligently incurred by the accounting officer, subject to subsection (3); |
| (c) | any political office-bearer or official of a municipality who deliberately or negligently committed, made or authorised an irregular expenditure, is liable for that expenditure; or |
| (d) | any political office-bearer or official of a municipality who deliberately or negligently made or authorised a fruitless and wasteful expenditure is liable for that expenditure. |
| (2) | A municipality must recover unauthorised, irregular or fruitless and wasteful expenditure from the person liable for that expenditure unless the expenditure- |
| (a) | in the case of unauthorised expenditure, is— |
| (i) | authorised in an adjustments budget; or |
| (ii) | certified by the municipal council, after investigation by a council committee, as irrecoverable and written off by the council; and |
| (b) | in the case of irregular or fruitless and wasteful expenditure, is, after investigation by a council committee, certified by the council as irrecoverable and written off by the council. |
| (3) | If the accounting officer becomes aware that the council, the mayor or the executive committee of the municipality, as the case may be, has taken a decision which, if implemented, is likely to result in unauthorised, irregular or fruitless and wasteful expenditure, the accounting officer is not liable for any ensuing unauthorized, irregular or fruitless and wasteful expenditure provided that the accounting officer has informed the council, the mayor or the executive committee, in writing, that the expenditure is likely to be unauthorised, irregular or fruitless and wasteful expenditure. |
| (4) | The accounting officer must promptly inform the mayor, the MEC for local government in the province and the Auditor-General, in writing, of— |
| (a) | any unauthorised, irregular or fruitless and wasteful expenditure incurred by the municipality; |
| (b) | whether any person is responsible or under investigation for such unauthorised, irregular or fruitless and wasteful expenditure; and |
| (c) | the steps that have been taken— |
| (i) | to recover or rectify such expenditure; and |
| (ii) | to prevent a recurrence of such expenditure. |
| (5) | The writing off in terms of subsection (2) of any unauthorised, irregular or fruitless and wasteful expenditure as irrecoverable, is no excuse in criminal or disciplinary proceedings against a person charged with the commission of an offence or a breach of this Act relating to such unauthorised, irregular or fruitless and wasteful expenditure. |
| (6) | The accounting officer must report to the South African Police Service all cases of alleged— |
| (a) | irregular expenditure that constitute a criminal offence; and |
| (b) | theft and fraud that occurred in the municipality. |
| (7) | The council of a municipality must take all reasonable steps to ensure that all cases referred to in subsection (6) are reported to the South African Police Service if— |
| (a) | the charge is against the accounting officer; or |
| (b) | the accounting officer fails to comply with that subsection. |
| (8) | The Minister, acting with the concurrence of the Cabinet member responsible for local government, may regulate the application of this section by regulation in terms of section 168. |