A Few Critical Observations Of Current Oversight And Accountability Challenges Of Financial Management of Municipalities In The Free State Province: An Ethical Dilemma

Abstract

Ethics, oversight and accountability forms part of the founding principles of public administration which needs to be espoused and practice by the leadership and officials in South African public sector of which local sphere of government cannot be excluded. The Constitution of the Republic of South Africa, 1996 (hereafter refers to as the Constitution, 1996) set out the constitutional democratic values and principles that require all political and public officials (functionaries) to behave in an ethical and accountable manner. The Local Government: Municipal Financial Management Act, (Act 56 of 2003) (hereafter refers to as the MFMA, 2003) compels municipalities to establish internal Audit Units and Audit Committees to promote control, ethics and accountability in the management of municipal financial affairs. Section 79 of the Local Government: Municipal Structures Act (Act 117 of 1998) provides for the establishment of Municipal Public Accounts Committees (MPACs) responsible to exercise oversight on behalf of the municipal council. Despite of these, the recent Auditor-General General Report on local government audit outcomes of 2018-2019 confirms that there is continued breakdown in internal controls due to poor leadership responses towards improving accountability, capacity and stability in municipalities in the Free State province (AGSA 2020:10). The Auditor-General further cautioned that municipalities in the Free State province will not be able to continue on the current downward spiral of financial maladministration as their financial performance has continuously deteriorated over the last five years, as a result of this 80% of municipalities are now in a vulnerable financial position (AGSA 2020:39). The article provides a critical overview of the current oversight and accountable challenges related to financial management of municipalities in the Free State province. It is argued in the article that there is an interconnection between ethics, oversight and accountability. It is further argued that the lack of municipal financial oversight and accountability encourages, unethical behaviour of municipal functionaries (political and administrative municipal officials), that subsequently lead to a culture of limited or no consequences which in turn harms public trust in local government.