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Local Government: Municipal Finance Management Act, 2003 (Act No. 56 of 2003)

Chapter 13 : Resolution of Financial Problems

Part 2 : Provincial interventions

146. Implementation of financial recovery plans in mandatory provincial interventions


(1) If the recovery plan was prepared in a mandatory provincial intervention referred to in section 139
(a) the municipality must implement the approved recovery plan;
(b) all revenue, expenditure and budget decisions must be taken within the framework of, and subject to the limitations of, the recovery plan; and
(c) the municipality must report monthly to the MEC for finance in the province on the implementation of the plan in such manner as the plan may determine.


(2) The financial recovery plan binds the municipality in the exercise of both its legislative and executive authority, including the approval of a budget and legislative measures giving effect to the budget, but only to the extent necessary to achieve the objectives of the recovery plan.


(3) The provincial executive must in terms of section 139(5)(b) of the Constitution either—
(a) dissolve the council of the municipality, if the municipality cannot or does not approve legislative measures, including a budget or any revenue-raising measures, necessary to give effect to the recovery plan within the time frames specified in the plan and—
(i) appoint an administrator until a newly elected council has been declared elected; and
(ii) approve a temporary budget and revenue-raising measures, and other measures to give effect to the recovery plan and to provide for the continued functioning of the municipality; or
(b) assume responsibility for the implementation of the recovery plan to the extent that the municipality cannot or does not take executive measures to give effect to the recovery plan.


(4) Sections 34(3) and (4) and 35 of the Municipal Structures Act apply when a provincial executive dissolves a municipal council in terms of section 139(5)(b)(i) of the Constitution.