The managers’ perceptions of irregular expenditure In the KwaZulu-Natal municipalities.
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Date
2018
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Abstract
Background: While the Municipal Finance Management Act (MFMA, 2003) requires
accounting officers to prevent irregular expenditure, municipalities continue to incur such
expenditure.
Aim: This study aimed to determine the managers’ perceptions of irregular expenditure in the
KwaZulu-Natal municipalities; their perceptions of councillors’ oversight of such expenditure,
and managers’ views on the capacity of Municipal Public Account Committees (MPACs) to
fulfil their oversight role.
Setting: The setting for this study is municipalities in KwaZulu-Natal.
Methods: A descriptive and analytical cross-sectional design using systematic sampling was
employed. The responses of 52 managers were analysed.
Results: Managers agreed on the need for compliance with procurement processes and proper
planning. They also concurred that irregular expenditure negatively impacts social
transformation and wealth redistribution. The study respondents were of the view that
irregular expenditure occurs due to manipulation and unfair practices, a lack of transparent
supply chain management processes and politicians’ interests in tenders. In their opinion,
councillors fail to investigate liability for irregular expenditure as required by section 32(2)
(a) and (b) of the MFMA. They reported that serious cases of irregular expenditure where
there were allegations of fraud, theft and corruption had not been investigated. Furthermore,
disciplinary proceedings were not instituted against those that did not act in good faith and
committed serious financial misconduct that resulted in municipalities incurring financial
losses.
Conclusion: Irregular expenditure harms municipalities’ image and negatively impacts social
transformation. Municipalities, Cooperative Governance and Traditional Affairs (CoGTA)
and the South African Local Government Association (SALGA) should invest in capacity
building, implement effective fraud prevention plans and enhance the capabilities of those in
charge of oversight.
Contribution to the Study: The study makes a practical contribution towards understanding of
the incidence of irregular expenditure and how it can be prevented. In addition, the study is
the first to be undertaken in South Africa. This will serve as a foundation and source of
reference for further studies.
Description
Masters Degree. University of KwaZulu-Natal, Durban.