An exploration of measures to enhance the financial sustainability of the uMgungundlovu District Municipality.

Abstract

This study investigates the financial sustainability of the uMgungundlovu District Municipality (UMDM), a key component of effective municipal governance in South Africa. The research is guided by four theoretical frameworks: Financial Control Theory, Contingency Theory, Collaborative Governance Theory, and Risk Management Theory. Financial Control Theory underscores the need for sound fiscal management and accountability; Contingency Theory considers the municipality’s adaptability to external pressures such as economic and technological changes; Collaborative Governance Theory emphasizes stakeholder cooperation in addressing complex service delivery issues; and Risk Management Theory highlights the importance of identifying, assessing, and mitigating financial and operational risks to safeguard long-term sustainability. The research examines the root causes of financial instability, including escalating debtor balances, cash flow difficulties, and operational inefficiencies, while proposing actionable strategies to strengthen the municipality’s financial resilience. A convergent one-phase mixedmethod approach was employed, integrating quantitative data from 104 municipal customers with qualitative insights from interviews with 9 municipal officials. This comprehensive methodology enabled a thorough analysis of financial management practices, customer experiences, and operational challenges within UMDM. Key findings indicate that economic constraints, inaccurate billing, and errors in municipal statements significantly hinder customers' ability to pay for services. High tariff rates and insufficient income exacerbate these challenges. Qualitative insights further reveal issues such as aging infrastructure, inconsistent meter readings, and weak enforcement of policies and bylaws as major barriers to financial sustainability. Municipal officials emphasized the importance of strategic leadership, robust governance, and enhanced financial practices to address these challenges effectively. The study concludes that achieving financial sustainability requires a holistic approach. Proactive public engagement, consumer education, and strengthened collaborative governance are essential for fostering stakeholder trust and compliance. Additionally, operational reforms, including modernised infrastructure, improved financial controls, and integrated planning, are critical to ensuring UMDM’s ability to deliver equitable and sustainable services amidst economic and institutional challenges.