Assessing the impact of the Municipal Financial Minimum Competency Programme on expenditure management

Abstract

Municipal expenditure management is critical for leveraging the overall effective performance of the Department of Local Government. This research assessed the impact of the municipal financial minimum competency programme on expenditure managementin five local municipalities in the Bojanala Platinum District Municipality (Bojanala Platinum). These five local municipalities are: Moretele, Madibeng, Moses Kotane, Kgetlengrivier and Rustenburg. The study, which was based on the quantitative research approach, was conducted by using the prescribed financial ratios of the National Treasury (2014) to assess the impact of the municipal financial minimum competency programme on expenditure management in the five local municipalities in Bojanala Platinum. The research findings demonstrated some of the local municipalities striving to bring the ratios for their capital expenditure to total expenditure within the prescribed National Treasury’s (2014:1) norm of 10%–20%. Such quests were found to be accompanied by initiatives to control the ratios on the capital expenditure budget implementation indicator, as well as the operating expenditure budget implementation indicator within the National Treasury’s (2014:1) norm of 95%–100%. Findings further indicated significant efforts being made by some of the local municipalities to manage their current ratios. However, despite these improvements, it became evident that, even after the implementation of the municipal minimum competency programmes, most of the local municipalities are still grappling with the challenge of managing irregular, fruitless, wasteful and unauthorised expenditures. Higher rates of irregular, fruitless, wasteful and unauthorised expenditures were found to be exacerbated by poor budget implementation, resulting in either overspending or underspending. This view was echoed by signs of improvement in local municipalities, such as the Rustenburg Local Municipality, not being easily discernible – even after the implementation of the municipal minimum competency programmes. Incidents of over or underspending were still fully prevalent. Combined with the increasing difficulties of managing and maintaining the appropriate liquidity position, these situations affected the efficiency of municipal expenditure management and budget implementation. The analysis of the Auditor-General’s reports of the financial years 2007/2008, 2013/2014, 2014/2015 and 2015/2016 for all the local municipalities in Bojanala Platinum District attributed to some of the causes of the challenges in deficient internal control systems, inaccuracy of budgeting, poor governance, lack of leadership, oversight, poor working capital management and poor records management. These internal conditions have obviously affected the extent to which the implementation of the municipal minimum competency requirements in the Bojanala Platinum District Municipality has impacted on the improvement of the municipal expenditure management. To discern new strategies through which the implementation of the municipal minimum competency requirements in the Bojanala Platinum District Municipality can be improved, it is argued that the North West Provincial Treasury should consider developing effective internal control systems, as well as a centralised Bojanala Platinum District Municipality procurement system. These systems should be accompanied by the enforcement of the principles of good governance, so as to curtail corruption and unethical practices. Furthermore, the North West Provincial Treasury should emphasise the need for the municipal officials’ working capital management skills and competencies for upholding financial ethics, training and development. These skills sets should be accompanied by the development of the skills and competencies critical for edifying effective budget development and implementation. Future research can opt to explore the constraints involved in the implementation of the municipal minimum competency programmes.