This is despite the presents of various legal mechanisms aimed at promoting effective, transparent and accountable local government. One such measure is the requirement for senior municipal managers to declare their financial interests and for a portion of these declarations to be made public. The question then is: are municipalities and their staff complying with this requirement? On the basis of data generated through a survey, it was established that there is a lack of compliance with this requirement across municipalities.

The law

Senior managers, i.e., the municipal manager and managers directly accountable to the municipal manager, lead the administrative arm of the municipality. Section 55(2) of the Municipal Systems Act, 32 of 2000, (Systems Act) designates a municipal manager as the accounting officer responsible and accountable for all income and expenditure of the municipality, and all assets and the discharge of all liabilities of the municipality. Section 12(4), 77(2), 78(1) and 115 of Municipal Finance Management Act, 56 of 2003, (MFMA) further charges senior managers with financial administration and supply chain management responsibilities. These responsibilities give senior managers significant access to municipal finances, increasing the risk of conflicts of interest and corruption. Hence, the law requires transparency around the financial interests of senior managers.

The Systems Act sets out a Code of Conduct applicable to all municipal staff. Schedule 2 of the Act details the provisions of this Code. Item 5(1) of this Code of Conduct requires a staff member of a municipality who, or whose spouse, partner, business associate, or close family member, acquired or stands to acquire any direct benefit from a contract concluded with the municipality, to disclose in writing full particulars of the benefit to the council.

With regards to the publication of financial interest declarations, Item 5A(3) of the Code of Conduct for Municipal Staff Members requires the municipal council to determine which of the declared financial interests should be made public, having regard to the need for confidentiality and the public interest.  The Code clearly stipulates that, for the sake of confidentiality and privacy of senior managers, not all declarations should be made public. It thus grants discretion to the municipal council to determine which declarations must be published.

An overview of the methodology

A total of 20 municipalities were surveyed to assess compliance with legislation requiring the publication of senior municipal managers’ financial interests. For each of the 20 municipalities, four annual reports were reviewed to address the following two main questions:

Does the municipality publish an Annual Report that includes a register of senior managers’ financial interests?
There are two possible answers:

Yes: the municipality publishes an Annual Report that includes a register of senior managers’ financial interests; or
No: the municipality does not publish an Annual Report, or the published Annual Report does not include a register of senior managers’ financial interests.

Does the register of financial interests provide meaningful information about the actual financial interest/s, held by senior managers?
There are three possible answers:

Yes: the information in the register is meaningful and enables the public to know what actual interests are held by senior managers.
Somewhat: the register contains some information, but it is not enough to enable the public to know what actual interests are held by senior managers; or

No: the information in the register is not meaningful. The register is empty, or the information is too generic or unsubstantiated to enable the public to know what actual interests are held by senior managers.

The same set of questions is used across four financial years (2019-2020, 2020-2021, 2021-2022, 2022-2023), with two questions - Question A and Question B - posed each year. This results in a total of eight questions for the four years under review. The total scores for all questions are presented in the final column for each municipality in Table 1 below, where a response of “Yes” earns one point, and “Somewhat” earns half a point and “No” earns no point. The findings of this survey are presented in the table below, followed by a discussion.

Findings and discussion

The survey findings show that many municipalities are not complying with the legal requirement relating to the publication of senior municipal manager’s financial interests. For those municipalities that are publishing a portion of the declarations of financial interest, accessing this information is challenging. The law does not specify where municipalities should publish this information, necessitating a thorough search through municipal documents and websites for financial declarations. Rather than displaying this information on municipal websites as one might expect, municipalities include financial interests of senior municipal managers as annexures to their annual reports. The challenge, however, is that some annual reports are not available online.

The findings also reveal a range of compliance levels, from full compliance – where senior managers provide detailed disclosure – to complete non-compliance where no financial declarations were made. For instance, municipalities such as the City of Polokwane provide detailed financial disclosures. This Municipality scored a total of eight points as it satisfied the requirements for a ‘yes’ on all questions. Other municipalities such as Msunduzi and Emfuleni, failed to publish these financial interests altogether, these municipalities scored ‘zero’. Among the municipalities that do disclose financial interests, the information provided is often insufficient. The score for these municipalities varies between two and seven.

Financial interest declarations are typically included in annual reports however, some municipalities do not include this information in these reports. In other spheres of government, this information can be requested via an application in terms of the Promotion of Access to Information Act, Act 2 of 2000, (PAIA) if not published, but for municipalities, the Code of Conduct for Municipal Staff Member does not subject access to this information to PAIA requests. Even if it did, subjecting accessibility of such information to PAIA also presents another dilemma when the Code of Conduct for Municipal Staff Members already exist for this purpose.

Table 1: Survey results from the assessment of municipal annual reports

Conclusion
The study established that not all municipalities are complying with the requirement for the publication of a certain portion of the declarations of financial interests for senior municipal managers. There are also inconsistencies among municipalities when publishing senior managers’ financial interests. This undermines transparency and makes it difficult for the public to enforce accountability. It is against this backdrop that I propose legislative reforms to prescribe what should be published and where. Such a legislative reform process could aim to establish standardised publication practice across local government, establish a dedicated entity for coordinating the declaration and publication of financial interests at the local level, and ensure consequence management for municipalities failing to publish financial interests.

By Awonke Baba, MPhil candidate, Dullah Omar Institute