Supply Chain Management exemption for Municipal entities
The Municipal Supply Chain Management regulations (gazette 27636 dated 30 May 2005) prohibits municipalities and their entities from making an award to a person in the service of the state. This prohibition extends to the members of a board of directors of any municipal entity. The Minister of Finance has exempted municipalities and municipal entities from this regulation in respect to non-executive members of boards of directors of municipal entities, until 30 June 2010 unless repealed earlier (see gazette no 28411 below - 18 January 2006).
The National Treasury has further condoned departure from regulation 44 prior to this exemption coming into effect (see condonation notice below).
This exemption does not apply to the municipal entity on which the non-executive member serves, which remains fully bound by regulation 44. The illustration below will assist with this explanation.