Public financial management framework for the Department of Public Works in Durban Metro, South Africa.

Abstract

During Apartheid era the Public Service of the RSA did not adhere to principles of good governance like (PFM), transparency and accountability. They were actual lip or spoken conceptual frameworks, but not executed to the latter. As a consequence (PFM) operational systems and processes experienced insurmountable challenges ranging from embezzlement and squandering of public funds. Unprecedented failures by government institutions and employees to comply with financial legislation led to fraud and corruption skyrocketing. Mammoth task facing democratic government was to overhaul and transform Apartheid regime PFM systems. The amalgamation and integration of SA’s Public Service into single unit was indispensable yet it caused gigantic challenges. One of the pressing challenges faced democratic government was to gain citizenry confidence, therefore public financial management reforms, transparency and accountability was at the epicenter to gain legitimacy. The SA’S Constitution affirms that execution of (PFM) regulatory reforms, systems and strategies must aligned with PFMA. Despite democratic government innovations of improving government financial operations and performances, some provincial and local governments had not complied with public performance-measurement. That led to some being placed under national or provincial administration under section 100 and 139 (1 and 4) or 137 of the MFMA under the SA’s Constitution. Theoretical frameworks and systems of performance measurement were designed to assist the employees to achieve efficiency, effectiveness and decision making. Successful changes envisaged by the democratic regime required financial, technical and human resources to bolster the process. Literature emphasized that resources are fundamental elements needed in improving public sector and subsequently bring the envisaged change. Literature consistent findings highlights that organizational change does not come cheap and it requires incentives and trade-offs to be successful. SA’s government changes were needed to redirect the scarce resources of the state towards a new host of avenues, developing new strategies, processes, practices, plans to implement proposed change, and redeployment of employees with expertise. Strategic interventions became an indispensable phenomenon why the change was envisage at that point. There was an urgency of reorganizing and restructuring governmental operational systems to test the recent innovations. Failure to provide necessary resources to beef up envisage change would have led to feeble execution efforts coupled with high levels organizational failures. PFM is the case study taking into cognizance PFMA’s impact in handling public revenue in government institutions like Department of Public Works. PFMA is an Act crafted to strengthen the objectives of sound public financial management. PFM and PFMA had to ensure that financial modernization and improvements were implemented. PFMA, of 1999 must safeguard that management manages operations with distinction, be held accountable by eradicating fraud, corruption, and wasteful expenditure in government. Twenty four years after 1994 democratic dispensation SA’s public service transformation continues, but government struggle to produce clean financial audits. SA is constitutional democracy mandated to implement PFMA in all government institutions. The study assesses success rate at which financial management reforms like PFMA, PFM, Integrated Financial Management System (IFMS) and New Public Financial Management (NPFM) mechanisms has achieved in handling public finances. PFM must ensure proper utilization of public funds by meeting defined standards of probity, regularity, efficiency and effectiveness.