South Africa’s Municipal Financial Management Patterns from 2016 – 2021

Abstract

This paper begins by critically interrogating both the establishment phase (1995 – 2006) and the decline phase (2006 – 2016) of the post-apartheid system of modern local government in South Africa. This study then investigates whether a combination of social, political and legal changes that occurred around 2018 were sufficient to influence the performance of the Fourth Local Government Administration (2016 – 2021) in terms of its pattern of financial management and service delivery over its five-year term of office. This is done to determine if the Fourth Administration continued, arrested, or turned around the decline phase of local government.Following a quantitative approach, this study aggregates secondary data from a series of reports from the Auditor-General of South Africa relating to two indicators, namely audit outcomes and patterns of unauthorised, irregular, and fruitless and wasteful expenditure, as well as year-end budget deficits, for approximately 300 municipalities and municipal entities over the full five-year period of the Fourth Local Government Administration’s term of office. Analysis of this data using Pearson’s chi-squared statistic together with Cramer’s V, shows no significant changes in either indicator over these five years. Noting that this is neither a decline nor improvement, the role of the Fourth Local Government Administration as a slow turning point is discussed, together with recommendations for the new Fifth Local Government Administration.