Evaluating the effectiveness of expenditure management in reducing budget deficits: a case study of eThekwini Water and Sanitation.

Abstract

The escalating budget deficits within the Water and Sanitation Unit of eThekwini Municipality has become a fast-growing concern as it reflects certain grave inefficiencies in the budget and expenditure management within the unit. This study attempts to evaluate the effectiveness of the management of expenditure, illustrating this by use of the case of eThekwini Municipality Water and Sanitation Department. The fundamental purpose of the study was to evaluate the effectiveness of the expenditure management within the unit and its correlating expenditure management approaches that would assist the unit in eradicating the prevalent budget deficits. The study employed a mixed methods approach to gather information. A total of thirty (30) participants were nominated to contribute to the quantitative study. The researcher purposively selected four participants to participate in the qualitative research, where the semi-structured, in profundity interviews were conducted. The participants indicated that there was little involvement of the technical managers in the preparation of the budget, which means that they have no knowledge of the monies being allocated to them at the beginning of the financial year. This was mainly executed by the finance section and the head of the department with the exclusion of the line managers. Line managers commence the financial year unaware of what their budget allocation is. Lack of investment in the rehabilitation of infrastructural assets was also mentioned by the participants as one of the primary causes of budget deficits, since most funds are utilised in the restoration of the ageing infrastructure. Lack of planning and coordination of the operations were also highlighted since most of the expenditure incurred is on a reactive basis rather than on a proactive basis. The internal control deficiencies were also highlighted as one of the factors contributive to the futility of the expenditure management. It was recommended that the zero-based budgeting be adopted, technical managers enroll for minimum competency training on financial management and technical managers review and analyse financial report on a regular basis.