A municipality must -

1. establish a performance management system that is -
1. commensurate with its resources;
2. best suited to its circumstances; and
3. in line with the priorities, objectives, indicators and targets contained in its integrated development plan;
2. promote a culture of performance management among its political structures, political office bearers and councillors and in its administration; and
3. administer its affairs in an economical, effective, efficient and accountable manner.

The executive committee or executive mayor of a municipality or, if the municipality does not have an executive committee or executive mayor, a committee of councillors appointed by the municipal council must -

1. manage the development of the municipality's performance management system;
2. assign responsibilities in this regard to the municipal manager;
3. and submit the proposed system to the municipal council for adoption.

A municipality must establish mechanisms to monitor and review its performance management system.

1. A municipality must in terms of its performance management system and in accordance with any regulations and guidelines that may be prescribed -
1. set appropriate key performance indicators as a yardstick for measuring performance, including outcomes and impact. with regard to the municipality’s development priorities and objectives set out in its integrated development plan;
2. set measurable performance targets with regard to each of those development priorities and objectives;
3. with regard to each of those development priorities and objectives and against the key performance indicators and targets set in terms of paragraphs (a) and (b) -
1. monitor performance; and
2. measure and review performance at least once per year;
4. take steps to improve performance with regard to those development priorities and objectives where performance targets are not met; and
5. establish a process of regular reporting to -
1. the council, other political structures, political office bearers and staff of the municipality; and
2. the public and appropriate organs of state.
2. The system applied by a municipality in compliance with subsection (1)(c) must be devised in such a way that it may serve as an early warning indicator of under-performance.

A municipality, through appropriate mechanisms, processes and procedures established in terms of Chapter4, must involve the local community in the development, implementation and review of the municipality's performance, management system, and, in particular, allow the community to participate in the setting of appropriate key performance indicators and performance targets for the municipality.

1. The Minister, after consultation with the MECS for local government and organised local government representing local government nationally, may -
1. by regulation prescribe general key performance indicators that are appropriate and that can be applied to local government generally; and
2. when necessary, review and adjust those general key performance indicators.
2. Key performance indicators set by a municipality must include any general key performance indicators prescribed in terms of subsection (1), to the extent that these indicators are applicable to the municipality concerned.

A municipality, in a manner determined by its council, must make known both internally and to the general public, the key performance indicators and performance targets set by it for purposes of its performance management system.

The results of performance measurements in terms of section 41(1)(c) must be audited -

1. as part of the municipality's internal auditing processes; and
2. annually by the Auditor-General.

1. A municipality must prepare for each financial year an annual report consisting of -
   
   1. a performance report reflecting -
      
      1. the municipality's, and any service provider's, performance during that financial year, also in comparison with targets of and with performance in the previous financial year;
      2. the development and service delivery priorities and the performance targets set by the municipality for the following financial year; and
      3. measures that were or are to be taken to improve performance;
   2. the financial statements for that financial year prepared in accordance with the standards of generally recognised accounting practise referred to in section 89 of the Public Finance Management Act, 1999 (Act No. 1 of 1999);
   3. an audit report on the financial statements and the report on the audit performed in terms of section 45(b); and
   4. any other reporting requirements in terms of other applicable legislation.
2. A municipality must table its annual report within one month of receiving the audit report referred to in subsection (1)(c).
3. ...
   
   1. The municipal manager must -
      
      1. by prior notice in the media, inform the local community of the meeting or meetings of the council at which the municipality's annual report is tabled or discussed, which meetings must be open to the public;
      2. give written notice of such meetings to the Auditor-General and the MEC for local government in the province;
      3. submit copies of the minutes of those meetings to the Auditor-General and the MEC for local government in the province;
   2. Representatives of the Auditor-General and the MEC for local government in the province are entitled to attend and to speak at such meetings, and the municipal manager must be available to respond to questions related to the annual report.
4. The municipality must adopt its annual report, and within 14 days -
   
   1. make copies of the report accessible to the public, interested organisations and the media, free of charge or at a reasonable price; and
   2. submit a copy of the report to -
      
      1. the MEC for local government in the province;
      2. the Auditor-General; and
      3. such other institutions as may be prescribed by regulation,

1. The MEC for local government must annually compile and submit to the provincial legislatures and the Minister a consolidated report on the performance of municipalities in the province.
2. The report must -
1. identify municipalities that under-performed during the year;
2. propose remedial action to be taken; and
3. be published in the Provincial Gazette.
3. The MEC for local government must submit a copy of the report to the National Council of Provinces.

1. The Minister must annually compile and submit to Parliament and the MECS for local government a consolidated report of local government performance in terms of general key performance indicators.
2. The report must be published in the Gazette.

1. The Minister may for the purposes of this Chapter make regulations or issue guidelines in terms of section 120 to provide for or regulate -
   
   1. incentives to ensure that municipalities establish their performance management systems within the applicable prescribed period, and comply with the provisions of this Act concerning performance management systems;
   2. the setting of key performance indicators by a municipality with regard to its development objectives;
   3. the identification of appropriate general key performance indicators that can be applied to municipalities generally and that reflect the object and intent of section 23;
   4. the regular review by a municipality of its key performance indicators;
   5. the setting of' a framework for performance targets by municipalities consistent with their development priorities, objectives and strategies set out in their integrated development plans;
   6. mechanisms, systems and processes for the monitoring and measurement of performance by a municipality with regard to its development objectives;
   7. the internal auditing of performance measurements;
   8. the assessment of those performance measurements by a municipality;
   9. the assessment of progress by a municipality with the implementation of its integrated development plan;
   10. the improvement of performance;
   11. any other matter that may facilitate
       
       1. the implementation by municipalities of an effective system of performance management; or
       2. the application of this Chapter.
2. When making regulations or issuing guidelines in terms of section 120 to provide for or to regulate the matters mentioned in subsection (1) of this section, the Minister must -
   
   1. take into account the capacity of municipalities to comply with those matters; and
   2. differentiate between different kinds of municipalities according to their respective capacities.
3. The Minister, by notice in the Gazette, may phase in the application of the provisions of this Chapter which place a financial or administrative burden on municipalities.
4. A notice in terms of subsection (3) may -
   
   1. determine different dates on which different provisions of this Chapter becomes applicable to municipalities;
   2. apply to all municipalities generally;
   3. differentiate between different kinds of municipalities which may, for the purpose of the phasing in of the relevant provisions, be defined in the notice in relation to categories or types of municipalities or in any other way; or
   4. apply to a specific kind of municipality only. as defined in the notice.