The Municipal Finance Improvement Programme (MFIP) aims to assist and support all three spheres of government to effectively perform their responsibilities regarding local government financial management compliance, support, monitoring and oversight.

The MFIP provides support to national and provincial treasuries as well as targeted municipalities, with a focus on providing the skills and expertise needed for improved municipal financial management.

This strategically driven programme of technical support is aligned with the six local government financial management ‘game changers’ and is designed to bolster the institutional and technical financial management capacity of the National Treasury, the provincial treasuries and municipalities.

Municipal Finance Improvement Programme

The MFIP’s overall strategic goal is to help improve practices and outcomes in local government financial management by placing technical advisors at these entities.

The MFIP has been implemented in three phases. Each phase runs for three years and has a slightly different focus.

Municipal Finance Improvement Programme (MFIP) - GTAC

MFIP III

The third three-year phase, MFIP III commenced on 1 April 2017 and concluded on 31 March 2020. As at 31 March 2020, the MFIP procured and deployed 80 technical advisors (TAs) at the following work streams and institutions (MFIP Footprint):

  • Direct capacity support to municipal budget and treasury offices in general financial management
  • Direct capacity support to the municipal finance units of provincial treasuries
  • Direct capacity support to three National Treasury chief directorates – Local Government Budget Analysis, Municipal Finance Management Act Implementation and SCM Policy and Legal
Support to National Treasury Divisions

MFIP offers direct technical support to three Chief Directors, namely Local Government Budget Analysis, OCPO and MFMA Implementation. Technical advisors were placed in the three Chief Directorates providing specialist support in:

  1. Financial Management Capability Maturity Model (FMCMM)
  2. Audit outcomes
  3. Budgeting and reporting
  4. Municipal Financial Recovery Service (MFRS)
  5. Revenue management

Support to PT Municipal Finance Units

MFIP offers direct technical support to the Municipal Finance Units of Provincial Treasuries (PTs) in the following areas: 

  1. General PT support
  2. Specialist SCM support
  3. Municipal Standard Chart of Account (MSCOA) support
  4. Specialist asset management support
  5. Specialist revenue management support

MFIP IIIx

The MFIP III was extended for an additional two years from 2020 to 2022. The extension of the MFIP III (MFIP IIIx) is based on the sheer scale of the persistent financial management challenges observed at the local sphere of government, such as deteriorating financial health, unfunded budgets, regression in audit outcomes, poor accounting, revenue, asset and supply chain management practices. The magnitude of the aforesaid challenges will require sustained and targeted technical support, particularly to distressed and dysfunctional municipalities over an extended period of time.  

MFIP IIIx will continue to be strategically aligned to the six Local Government Financial Management (LGFM) game changers adopted by the Budget Council, through the provision of direct technical capacity support to the National Treasury (NT), Provincial Treasuries (PTs) and Municipalities. This will be mainly achieved through the procurement and placement of Technical Advisors (TAs) within various NT divisions, the Municipal Finance Units of PTs, and the Budget and Treasury Offices (BTOs) of selected municipalities, according to identified work streams that will seek to functionally integrate and optimise the impact of the technical support. 

The MFIP IIIx operating model is set out in the figure below and illustrates the alignment of the integrated project work streams to the six LGFM game changers. It further shows the three modalities of providing direct institutional and technical capacity support to selected NT divisions, PT municipal finance units and the BTOs of identified municipalities.

Support to National Treasury Divisions

Direct technical support to three Chief Directors, namely:

  1. Local Government Budget Analysis,  
  2. MFMA Implementation and  
  3. Office of the Chief Procurement Officer.  

Technical advisors were placed in the three Chief Directorates providing specialist support in: 

  • Accounting and audit support
  • Budget and revenue management
  • Municipal Financial Recovery Service (MFRS) mSCOA
  • Budget and financial management
  • SCM

Support to PT Municipal Finance Units

Direct technical support to the Municipal Finance Units of Provincial Treasuries (PTs) in the following areas:

  • Specialist SCM support
  • Municipal Standard Chart of Account (mSCOA) support
  • Specialist asset management support
  • Accounting and audit support
  • Budget and revenue management

Support to municipalities

Direct technical support to the following municipal Budget and Treasury Office (BTOs) in general financial management areas across the nine provinces:

Eastern Cape

  1. Amahlathi LM[AR1] 
  2. Amathole District Municipality
  3. Chris Hani District Municipality
  4. Enoch Mgijima Local Municipality
  5. Greater Kei Local Municipality
  6. Iingquza Hills
  7. King Sabata Dalinyebo
  8. Port St Johns
  9. Sakhisizwe Local Municipality

Free State

  1. Kopanong Local Municipality
  2. Letsemeng Local Municipality
  3. Tokologo Local Municipality
  4. Xhariep District Municipality

Gauteng

  1. Emfuleni Local Municipality
  2. Merafong Local Municipality
  3. West Rand District Municipality

KwaZulu-Natal

  1. Jozini Local Municipality
  2. Amajuba District Municipality
  3. Newcastle Local Municipality
  4. Richmond Local Municipality

    Limpopo

    1. Modimolle-Mookgophong Local Municipality
    2. Tubatse-Fetakgomo Local Municipality
    3. Vhembe District Municipality

    Mpumalanga

    1. Govan Mbeki Local Municipality
    2. Lekwa Local Municipality

    Northern Cape

    1. Emthanjeni Local Municipality
    2. Joe Morolong Local Municipality
    3. Magareng Local Municipality
    4. Phokwane Local Municipality
    5. Renosterberg Local Municipality

    North West Province

    1. Ditsobotla Local Municipality
    2. Dr Ruth Mompati District Municipality
    3. Kgetlengrivier Local Municipality
    4. Madibeng Local Municipality
    5. Mamusa Local Municipality
    6. Moretele Local Municipality
    7. Naledi Local Municipality
    8. Ramotshwere Local Municipality
    9. Tswaing Local Municipality

    Western Cape

    1. Central Karoo District Municipality
    2. Kannaland Local Municipality
    3. Laingsburg Local Municipality
    Municipal Finance Improvement Programme (MFIP) - GTAC

    Project in the spotlight

    During 2019/2020, 2 280 capacity building sessions were held, involving 13 603 officials. The municipal advisors conducted 948 capacity building sessions, reaching 1 507 officials across 29 municipalities. The provincial advisors conducted 199 capacity building sessions, involving 1 007 officials from both provincial treasuries and municipalities.

    Finally, MFIP specialists conducted 1 133 capacity building sessions with 11 089 officials on topics such as Supply Chain Management (SCM), Revenue Management (RM), Asset Management (AM), mSCOA and the Municipal Financial Recovery Service (MFRS).

    Municipal Finance Improvement Programme (MFIP) - GTAC

    Capacity building

    MFIP capacity building and skills transfer initiatives support various institutional and technical areas in financial management in terms of the Municipal Finance Management Act and the local government reform agenda of the National Treasury.

    While these interventions are mostly informal and non-accredited, they assist in enhancing the practical, on-the-job skills of officials involved in municipal financial management.