Municipality of Gradacac is a unit of local government with the rights and obligations established by the Constitution and law. Municipality of Gradacac is legal entity. In the course of its jurisdiction the municipality will respect fundamental rights and freedom of each citizen and constituent peoples: Bosniacs ,Croats and Serbs , together with the others, and will ensure as far as possible their representation in accordance with the article IX 11. of the Constitution of Federation of Bosnia and Herzegovina. To this end Municipality will ensure equal rights and will intercede equal life conditions for all its citizens respecting national, religious and cultural identity and encourage their peaceful coexistence.
Municipality Day is on October 22- on this date during the Defensive war between 1992-1995 disabled and armoured train was stopped. Municipality transacts business which directly addresses the needs of citizens ,and particularly the affairs related to:
- Insurance and protection of human rights and fundamental freedoms,
- Adoption of the municipal budget
- Adoption of the program and the development plans of Municipality and creating conditions for economic development and employment,
- The establishment and implementation of spatial development policy and environmental protection,
- Adoption of spatial, urban and implementation plans, including zoning,
- Determination and implementation of housing policies and adoption of the program of housing and other construction,
- The establishment of policies and setting the level of fees for the use of public goods,
- Determination and policy-disposal, the use and management of construction land,
- Determination of management and disposal policy of municipal property,
- Establishment of the natural resource management policy of Municipality and distribution of revenue on the basis of their use,
- Management, financing and improvement of the operations and facilities of the local communal infrastructure: * water supply, sewerage and waste water treatment, * the collection and disposal of solid waste, * maintenance of public hygiene, * maintenance of local cemeteries and burial ground, * local roads and bridges, * street lighting * public parking * parks,
- Organization and improvement of local public transport,
- Establishment of pre-school education policy, improvement of the network of institutions, as well as management and financing of public institutions of pre-school education,
- The establishment, management, financing and improvement of elementary education,
- The establishment, management, improvement and financing institutions and the construction of facilities to meet the needs of the population in health care, culture and sports,
- Assessment ofthe work of institutions and the quality of services in the sector of health care, welfare, education, culture and sports, as well as providing financial resources for the improvement of their work and the quality of services in accordance with the needs of the population and the Municipality abilities,
- Analysis of the situation of public order, safety of people and property, and proposing measures to the competent authorities for these issues,
- Organizing, conducting and responsibility for protection measures and rescue of people and material assets from natural disasters ,
- The establishment and inspection over the regulations within the competence of the Municipality,
- Adoption of regulations on taxes, fees, contributions and taxes from the competence of the Municipality,
- Calling a referendum for the territory of the Municipality,
- Announcing public loans and making decisions on the debt of the Municipality,
- Taking measures to ensure the hygiene and health,
- Ensuring the working conditions of local radio and TV stations in accordance with the law,
- Provides and maintains records of personal status of citizens and polls,
- Transacts business related to land survey and cadastre and real estate records,
- Organises effective local governance adapted to local needs, and performs administrative tasks within its competence,
- Establishes the organisation of local self-government,
- Adopt programs of measures in order to achieve equality in the affairs, and provides management of statistical data and information disaggregated by gender,
- Concerns about the protection of animals,
- The protection and improvement of the environment and
- Consumer protection.

The municipality is also engaged in other affairs of local interest which are not excluded from their competence nor assigned to the other levels of government, and relate to

- Encouraging the implementation of effective measures to protect living standards and treating socially handicapped persons,
- Providing for the needs and interests of pensioners and older persons,
- Fostering traditional values, their improvement, including in particular those related to cultural heritage areas of the municipality,
- Takes measures to preserve the natural heritage, and historical, cultural and architectural heritage,
- Within the prescribed conditions of participating in the activities of citizens' associations,
- And transacts other activities that are of interest to the citizens of the Municipality and its economic, social, cultural and social progress.

In addition to its own competence Municipality also performs tasks of federal and cantonal authorities and the authorities entrusted to her in accordance with the law, where there will be taken into account the principle of subsidiarity and the ability of the Municipality to perform these tasks effectively. Carrying out the responsibilities of the previous paragraph depends on the levels assigned, respectively, transferred funds needed for carrying out these responsibilities.

The bodies of the Municipality are: 1. Municipal Council and 2. Mayor

The powers and obligations arising from the self-governing scope of the Municipality are divided between the representative body of the Municipal Council and the executive body of the Mayor. If by the law or other regulation is not clearly defined which body is responsible for transacting business from the authorities of the Municipality, all activities and business related to the regulation of relationships within the self-government of the Municipality (normative nature) are the responsibility of the Municipal Council, and all executive duties and tasks are the responsibility of the Mayor. If it is the case of executive jobs,and if certain responsibility for their conduct is not defined , the competent department is authorized by the Mayor.