A Financial Sustainability Model for the South African Local Government
- Authors: Mhlanga, Shepherd
- Date: 2019
- Subjects: Local government -- South Africa -- Eastern Cape -- Finance Municipal finance -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Doctoral , D.Admin
- Identifier: http://hdl.handle.net/10353/13715 , vital:39699
- Description: Local government financial sustainability leverages a local municipality’s capabilities to conceptualize and implement an array of its developmental programmes. This thesis evaluates the state of the initiatives for bolstering financial sustainability in the increasingly complex contemporary South African local government sphere. The motive of the study was to identify major paradoxes and a local government financial sustainability model that could be extracted and suggested for mitigating such constraints. Using a meta-synthesis as a principal technique in content analysis, findings revealed that major determinants of local government financial sustainability are often linked to the application of the four-step’s processes in strategic cyclical financial sustainability framework and three foundational constructs for financial sustainability management. The four-step’s processes in strategic cyclical financial sustainability framework were found to aid environmental analysis, identification of the sources of revenues and revenue generation, managing the utilization of the generated revenues and monitoring and evaluation. As it emerged from the findings, these positive effects of strategic cyclical financial sustainability framework are often illuminated by three foundational constructs for financial sustainability that leverage financial risk management, governance and leadership. However, in lieu of the application of relevant mitigating strategies, it also emerged from the analysis of the findings that initiatives that bolster financial sustainability may still be constrained by poor analysis and identification of the level of financial sustainability maturity. Other paradoxes were found to be linked to lack of suitable government financing models, poor strategic financial planning and budgeting as well as lack of effective models for managing equity. However, even in the midst of such paradoxes, findings still indicated that the concept of financial sustainability is a notion which is increasingly being emphasized by the South African local government sphere. To leverage municipal financial sustainability, most municipalities were found to use financial sustainability models and methods such as central financial grant system, SALGA’s model for financial sustainability, investment in revenue-generating activities and managing municipal operational efficiency as a driver of cost 4 | P a g e minimisation. However, despite such significant strides, findings still revealed that even with various socio-economic initiatives undertaken to leverage financial sustainability of the South African local government, the state of financial sustainability in the South African local government sphere seems to be at risk as viewed from such issues as compliance, systematic and strategic levels. As it emerged from the findings, this is attributable to the fact that most initiatives for improving financial sustainability in the South African local government are often still constrained by inadequate municipal capacity, limited income-generating activities, deficient local government procurement system and poor leadership and governance. Such findings seem consonant with theoretical findings that signified the major paradoxes of financial sustainability in the contemporary public sector organisations are often associated with poor analysis and identification of the level of financial sustainability maturity, lack of suitable government financing models, poor strategic financial planning and budgeting and lack of effective models for managing equity. Drawing from these findings, it is argued it is critical that the Department of Local Government adopts and applies the local government financial sustainability model akin to the conceptual model suggested in Figure 1. The application of such a model would require integration and use of the four main pillars (strategic financial planning, income diversification, sound financial administration and management, and own income generation) for local government financial sustainability, three foundational constructs (financial risk management, financial governance and financial ethical leadership) for local government financial sustainability, and three foundational nonfinancial constructs (political stability, fiscal and economic stability, forecasting and sensing to mitigate the devastating negative effects of natural calamities and disaster) for local government financial sustainability. It was further argued that all these must be accompanied by measurement of the overall maturity of the financial sustainability of the local municipality using four perspectives (liquidity, resilience, service and fiscal responsibility and public confidence) of local government financial sustainability in conjunction with the five spectrums (at risk, compliance-based, incremental, strategic and systematic) of local government financial sustainability.
- Full Text:
- Date Issued: 2019
- Authors: Mhlanga, Shepherd
- Date: 2019
- Subjects: Local government -- South Africa -- Eastern Cape -- Finance Municipal finance -- South Africa -- Eastern Cape
- Language: English
- Type: Thesis , Doctoral , D.Admin
- Identifier: http://hdl.handle.net/10353/13715 , vital:39699
- Description: Local government financial sustainability leverages a local municipality’s capabilities to conceptualize and implement an array of its developmental programmes. This thesis evaluates the state of the initiatives for bolstering financial sustainability in the increasingly complex contemporary South African local government sphere. The motive of the study was to identify major paradoxes and a local government financial sustainability model that could be extracted and suggested for mitigating such constraints. Using a meta-synthesis as a principal technique in content analysis, findings revealed that major determinants of local government financial sustainability are often linked to the application of the four-step’s processes in strategic cyclical financial sustainability framework and three foundational constructs for financial sustainability management. The four-step’s processes in strategic cyclical financial sustainability framework were found to aid environmental analysis, identification of the sources of revenues and revenue generation, managing the utilization of the generated revenues and monitoring and evaluation. As it emerged from the findings, these positive effects of strategic cyclical financial sustainability framework are often illuminated by three foundational constructs for financial sustainability that leverage financial risk management, governance and leadership. However, in lieu of the application of relevant mitigating strategies, it also emerged from the analysis of the findings that initiatives that bolster financial sustainability may still be constrained by poor analysis and identification of the level of financial sustainability maturity. Other paradoxes were found to be linked to lack of suitable government financing models, poor strategic financial planning and budgeting as well as lack of effective models for managing equity. However, even in the midst of such paradoxes, findings still indicated that the concept of financial sustainability is a notion which is increasingly being emphasized by the South African local government sphere. To leverage municipal financial sustainability, most municipalities were found to use financial sustainability models and methods such as central financial grant system, SALGA’s model for financial sustainability, investment in revenue-generating activities and managing municipal operational efficiency as a driver of cost 4 | P a g e minimisation. However, despite such significant strides, findings still revealed that even with various socio-economic initiatives undertaken to leverage financial sustainability of the South African local government, the state of financial sustainability in the South African local government sphere seems to be at risk as viewed from such issues as compliance, systematic and strategic levels. As it emerged from the findings, this is attributable to the fact that most initiatives for improving financial sustainability in the South African local government are often still constrained by inadequate municipal capacity, limited income-generating activities, deficient local government procurement system and poor leadership and governance. Such findings seem consonant with theoretical findings that signified the major paradoxes of financial sustainability in the contemporary public sector organisations are often associated with poor analysis and identification of the level of financial sustainability maturity, lack of suitable government financing models, poor strategic financial planning and budgeting and lack of effective models for managing equity. Drawing from these findings, it is argued it is critical that the Department of Local Government adopts and applies the local government financial sustainability model akin to the conceptual model suggested in Figure 1. The application of such a model would require integration and use of the four main pillars (strategic financial planning, income diversification, sound financial administration and management, and own income generation) for local government financial sustainability, three foundational constructs (financial risk management, financial governance and financial ethical leadership) for local government financial sustainability, and three foundational nonfinancial constructs (political stability, fiscal and economic stability, forecasting and sensing to mitigate the devastating negative effects of natural calamities and disaster) for local government financial sustainability. It was further argued that all these must be accompanied by measurement of the overall maturity of the financial sustainability of the local municipality using four perspectives (liquidity, resilience, service and fiscal responsibility and public confidence) of local government financial sustainability in conjunction with the five spectrums (at risk, compliance-based, incremental, strategic and systematic) of local government financial sustainability.
- Full Text:
- Date Issued: 2019
Assessment of the role of the board of directors in the implementation of corporate governance in the state owned entities: a case in the Eastern Cape Province
- Authors: Makhala, Nombuyiselo
- Date: 2019
- Subjects: Corporate governance Directors of corporations
- Language: English
- Type: Thesis , Doctoral , D.Admin
- Identifier: http://hdl.handle.net/10353/13642 , vital:39687
- Description: Corporate governance is a well-recognized governing method, which ensures that the organization achieves its goals. This concept has received too much attention due to the number of reported corporate scandals in both public and private entities. Due to these highly publicized governance failures, the role of Board of Directors in the implementation of corporate governance has been questioned. Their role has been the topic of interest. The main aim of this study was to assess the role of the Board of Directors in the implementation of Corporate Governance in the State Owned Entities in the Eastern Cape Province. It also aimed to determine the strategies and mechanisms that can be used to enhance the role played by the Board of directors in the successful implementation of corporate governance in the public entities. This research was qualitative in nature and as part of this approach data was gathered through questionnaires and interviews. For this study, small scale and manageable sample was used. The sample was selected with the view that all the participants selected were experienced and directly involved in the policy and decision-making as well as in implementation of corporate governance in the state-owned entities. The secondary data was collected through the audit reports, performance, and annual reports of the different public entities. The findings of this study revealed that some Board of Directors are unable to play the effective role in the implementation of corporate governance due to lack of experience and skills required. The research has also revealed that the Boards are not effective in their role due to lax in enforcing accountability by the shareholder. The findings on poor performance management of the Boards is because of no standardized performance management system for the Eastern Cape Province public entities in place. Political deployment of board members had an impact in the independency and objectivity of the boards. The study recommends the appointment of skilled and qualifying board members, training and induction of newly appointed be conducted. Development of accountability framework for all the boards of the public entities in the Eastern Cape. For the Boards to successfully play an effective role in the implementation of corporate governance, adequate budget should be allocated to the public entities. Lastly, the development of the standardized performance management system and framework with prescribed key responsibility areas for all the Boards of the state owned entities will assist the Boards in knowing what is expected of them.
- Full Text:
- Date Issued: 2019
- Authors: Makhala, Nombuyiselo
- Date: 2019
- Subjects: Corporate governance Directors of corporations
- Language: English
- Type: Thesis , Doctoral , D.Admin
- Identifier: http://hdl.handle.net/10353/13642 , vital:39687
- Description: Corporate governance is a well-recognized governing method, which ensures that the organization achieves its goals. This concept has received too much attention due to the number of reported corporate scandals in both public and private entities. Due to these highly publicized governance failures, the role of Board of Directors in the implementation of corporate governance has been questioned. Their role has been the topic of interest. The main aim of this study was to assess the role of the Board of Directors in the implementation of Corporate Governance in the State Owned Entities in the Eastern Cape Province. It also aimed to determine the strategies and mechanisms that can be used to enhance the role played by the Board of directors in the successful implementation of corporate governance in the public entities. This research was qualitative in nature and as part of this approach data was gathered through questionnaires and interviews. For this study, small scale and manageable sample was used. The sample was selected with the view that all the participants selected were experienced and directly involved in the policy and decision-making as well as in implementation of corporate governance in the state-owned entities. The secondary data was collected through the audit reports, performance, and annual reports of the different public entities. The findings of this study revealed that some Board of Directors are unable to play the effective role in the implementation of corporate governance due to lack of experience and skills required. The research has also revealed that the Boards are not effective in their role due to lax in enforcing accountability by the shareholder. The findings on poor performance management of the Boards is because of no standardized performance management system for the Eastern Cape Province public entities in place. Political deployment of board members had an impact in the independency and objectivity of the boards. The study recommends the appointment of skilled and qualifying board members, training and induction of newly appointed be conducted. Development of accountability framework for all the boards of the public entities in the Eastern Cape. For the Boards to successfully play an effective role in the implementation of corporate governance, adequate budget should be allocated to the public entities. Lastly, the development of the standardized performance management system and framework with prescribed key responsibility areas for all the Boards of the state owned entities will assist the Boards in knowing what is expected of them.
- Full Text:
- Date Issued: 2019
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