The impact of financial accountability on good governance and service delivery efficiency in selected provincial departments and municipalities in the Northern Cape Province

Abstract

Accountability (including financial accountability), good governance, and the delivery of effective services are constitutional priorities of South Africa's democratic system. Section 195(1) of the Constitution of the Republic of South Africa, 1996 (hereinafter referred to as the Constitution), states that accountability, including financial accountability, is essential, and that good governance and service delivery should be institutionalised across the three spheres of government. The Public Finance Management Act (Act 1 of 1999) (hereinafter referred to as the PFMA) and the Local Government, Municipal Finance Management Act (Act 56 of 2003) (hereinafter referred to as the MFMA) establish the legislative frameworks for financial management in the public sector.

Despite the requirements outlined in Section 195 of the Constitution to deliver services effectively, efficiently, economically and accountably, the ongoing adverse audit outcomes of some provincial departments and most municipalities, including those of the Northern Cape Provincial Government (NCPG), raised questions about the effectiveness of current financial accountability, good governance, and service delivery approaches. By focusing on a few selected provincial departments and local municipalities within the NCP, the researcher projected a comprehensive and holistic picture of the state of financial accountability in the NCP. Thus, the study aimed to contribute theoretically and empirically to the body of knowledge about the relationship between financial accountability, good governance, and service delivery efficiency in selected provincial departments and local municipalities in the NCP. To enhance an understanding on the details of financial accountability, good governance and public service delivery efficiency, the principal-agent theory, public-service dominant logic and new public management theory guided the study on public service delivery and management. The study employed a quantitative research approach and a cross-sectional survey research design to investigate the impact of financial accountability on good governance and service delivery efficiency in selected provincial departments and municipalities in the NCP. The study examined several variables related to financial accountability, good governance and service delivery efficiency, including legislative provisions, public expenditure, oversight bodies, principles of good governance, public service delivery, financial performance outcomes, supply chain management (SCM), financial controls, capacity of staff complements and stability in senior positions. A structured questionnaire was administered to 150 public officials in the selected provincial departments and to 79 municipal officials in the selected local municipalities. This study revealed that a lack of financial accountability frequently led to instances of financial misconduct and the disregard of important legislative frameworks, such as the PFMA, MFMA, and SCM regulations. The empirical phase of study employed both the descriptive and inferential statistical analyses. The empirical study revealed that the largest proportion of respondents from the selected provincial departments and municipalities agreed that poor financial accountability influenced poor financial performance. A significant proportion of respondents agreed that financial accountability has a positive influence on good governance and the efficiency of public service delivery. The hypotheses were tested through Spearman inferential statistical methods and consequently, it was found out that the alternative hypotheses H1a1 to H5a1 were accepted.

The study proposed a framework to promote financial accountability, good governance and public service delivery efficiency in the selected provincial departments and municipalities in the NCP.