ENHANCING FINANCIAL ACCOUNTABILITY IN SOUTH AFRICAN LOCAL MUNICIPALITIES: A CONSEQUENCE MANAGEMENT VIEWPOINT

Prince Enwereji

Studii Financiare (Financial Studies), 2022, vol. 26, issue 4, 19-47

Abstract: Achieving clean audit reports has remained a difficult task for most local municipalities in South Africa due to financial misappropriation, mismanagement, and the inability to apply legal actions against the defaulters who misuse municipal financial resources. This study explored the meaning of financial accountability, the state of municipal accountability in South Africa, the techniques other international countries adopt to ensure municipal financial accountability, the meaning of consequence management, and the possible measures to uphold consequence management in the local municipal context. A qualitative research approach was adopted, and a traditional literature review was applied to find answers to the study problems. Findings from the study reveal that financial accountability is the process of holding role-players who handle financial resources answerable to finances entrusted to them. It was discovered that the state of municipal financial management is worsening as only 17.8% of the municipalities could achieve clean audit reports in the 2020/2021 financial year. Considering the techniques used by international countries to achieve accountability, it was highlighted that they institute a central monitoring and reporting body to oversee the municipal financial practices while the concept of oversight is held in high esteem. Furthermore, it was discovered that most municipalities in South Africa do not facilitate consequence management, which has invariably escalated financial misappropriations and other poor financial practices. The study conclude that municipalities can enhance their financial practices if the recommendations of this study would be competently applied.

Keywords: municipal finance; clean audit reports; service provision; local municipalities; South Africa (search for similar items in EconPapers)
JEL-codes: H70 (search for similar items in EconPapers)
Date: 2022
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