National Treasury Issues MFMA Circular No. 132 for 2026/27 MTREF

Posted 24 February 2026 Written by Acts Online
Category Local Government

Brought to you by SA Accounting Academy: The National Treasury has issued MFMA Circular No. 132 to guide municipalities in the preparation of their 2026/27 Medium-Term Revenue and Expenditure Framework (MTREF).

In terms of the Local Government: Municipal Finance Management Act, No. 56 of 2003, the National Treasury has released MFMA Circular No. 132. This circular provides the regulatory framework and technical guidance necessary for municipalities to compile their 2026/27 MTREF. The primary objective is to ensure that municipal budgets are aligned with the latest Municipal Standard Chart of Accounts (mSCOA) requirements and reflect sustainable financial management practices.

The circular identifies several strategic “game changers” that municipalities must address to strengthen financial governance and improve service delivery outcomes. These include:

  • Ensuring that budgets are fully funded in accordance with section 18 of the MFMA;
  • Optimising revenue management and debt collection strategies;
  • Improving asset management and maintenance planning;
  • Adhering strictly to supply chain management processes;
  • Achieving full and correct implementation of mSCOA data strings; and
  • Proactively addressing previous audit findings to improve overall financial accountability.

Municipal leaders and practitioners are required to familiarise themselves with these requirements early in the budget cycle to ensure the submission of credible and compliant budgets. The guidance follows previous reforms aimed at enhancing transparency and accountability within the local government sphere.

Click here to download the MFMA Budget Circular No. 132 — 2026/27 MTREF documentation.

What this means for you, your business, or your clients

  • For yourself: No direct individual obligations; impact is channelled through professional advisory or oversight roles within the municipal finance sector.
  • For your business: Accounting and audit firms providing services to local government must update their compliance checklists and audit programmes to reflect the specific mSCOA and funding requirements mandated for the 2026/27 MTREF cycle.
  • For your clients: Municipal clients must ensure their 2026/27 budgets are technically compliant with Circular 132 to avoid the risk of budgets being flagged as unfunded or non-compliant during Treasury reviews.

Originally published at https://accountingacademy.co.za/news/read/national-treasury-new-guidance-for-municipal-budget-preparation

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