THE BLOG
01/06/2018 10:34 SAST | Updated 01/06/2018 13:24 SAST

Poor Financial Management By Municipalities Is A Crime

'The high level of inequality, poverty and unemployment affects mostly women, youth and children.'

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Financial mismanagement by municipalities perpetuates the socioeconomic oppression of women, youth and children.

The South African government before 1994 racially separated municipalities, perpetuating racial exclusion in terms of basic services provided to communities.

This has resulted in huge backlogs over the past 24 years, in terms of basic infrastructure to enable delivery of water and sanitation, primary healthcare, sport and recreation facilities, libraries and many other services required by all communities for their sustainable livelihood. It is worth noting that 51.3 percent of the population are women, and more than 37-million South Africans are younger than 34.

The democratic government post-1994 erased segregation laws, ushering in a new era with regard to local government and provision of basic services.

Local government's functions include the development and implementation of local-specific policies aimed at the betterment of the lives of people in local communities. Section 152 (1) (b) (c) of chapter 7 of the Constitution (as amended) explicitly defines the objects of local government — to ensure the provision of services to communities in a sustainable manner and to promote social and economic development.

Municipalities are allocated financial resources to advance development — however, there has been a high level of irregular expenditure in municipalities across the country.

Section 1 of the Public Finance Management Act (PFMA) defines irregular expenditure as "expenditure other than unauthorised expenditure, incurred in contravention of or not in accordance with a requirement of any applicable legislation, including — (a) this Act; or (b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of that Act; or (c) any provincial legislation providing for procurement procedures in that provincial government".

Proper financial management in local government will have a positive impact on service delivery that mostly benefits women, youth and children.

According to the audit results for 2016/17 financial year, irregular expenditure in municipalities stood at R28-billion. While there are those who argue that proper financial management does not ipso facto affect provision of quality services, former Auditor-General of SA Terence Nombembe in the Quality Service Delivery Report — a valuable tool to track progress on service delivery — said: "Admittedly, not looking after the finances does leave less financial resources available for service delivery, but keeping tight financial controls does not by itself guarantee the channelling of funds to areas responsive to the service delivery needs of communities. Proper management of service delivery information takes the process a step further and can be utilised to provide regular assurance to all stakeholders, including citizens, that indeed the funds are utilised for the predetermined objectives."

South Africa's high level of inequality, poverty and unemployment affects mostly women, youth and children. To alleviate poverty, the post-apartheid government introduced social grants, of which about 17-million South Africans receive various forms — costing more than R150-billion annually.

Notwithstanding this noble act by government, more still needs to be done to create jobs. The unemployment rate among young people was 38.2 percent in the first quarter of 2018. Lack of proper financial management might have an impact on the provision of services to the communities. Proper financial management in local government will have a positive impact on service delivery that mostly benefits women, youth and children.

The current Auditor-General, Kimi Makwetu, has indicated that among other problems, there is a lack of decisive leadership to address the lack of accountability — by ensuring consequences against those who flout financial processes in government. It is applauded that the National Assembly has just passed a Public Audit Amendment Bill, which empowers the Auditor-General to act against those implicated in irregular and wasteful expenditure in government departments.

Hopefully, this will assist in holding accountable those mismanaging municipalities' finances and ensure that there is value for money in projects aimed at improving people's lives. Hopefully the new law empoweringthe Auditor-General to act against those involved in financial mismanagement means there will implementation of consequence management.

Society must be vocal against those who have been mandated to manage and control the public purse and are failing to do so.

Scholar Joe Komane argues that government policies fail because of overinvestment in the political symbolism of policy, rather than its practical implementation. Such policy carries more significance in fulfilling political imperatives such as legitimation, than it does for achieving desired outcomes on the ground.

Society must be vocal against those who have been mandated to manage and control the public purse, and are failing to do so. Section 152 (2) of chapter 7 of the Constitution dictates that municipalities must strive, within their financial and administrative capacity, to achieve the objects of local government.

I argue that the majority of people who bear the brunt of poor financial management by municipalities are women, youth and children.

The high level of inequality, unemployment and poverty dehumanises women, youth and children more than any other person, and provision of quality services by local municipalities can make a positive impact in improving the lives of these marginalised groups. Poor financial management by some municipalities must be characterised as a crime.

Sediko Rakolote is a commissioner on the Commission for Gender Equality, writing in his personal capacity