An investigation into the effectiveness of budget management and intergrated development planning at Mafikeng Local Municipality

Abstract

The purpose of this study was to investigate the effectiveness of budget management and planning in the Mafikeng Local Municipality with a view to determining the implementation of performance budgeting. Structured interviews in the form of self-administered questionnaires were utilised as the measuring instrument. Information on the annual reports was also utilised to understand the situation at the Mafikeng Local Municipality. The municipal manager, the chief financial officer and the members of the municipal council were the selected participants in the study. Representatives of the labour unions were also selected to participate in the study. The study employed two methods of data analysis, the quantitative and qualitative data to determine the empirical and theoretical findings of the study. The findings of both the qualitative and quantitative analyses were similar as they revealed that the municipality had plans and budget in place. However, what was lacking was the alignment of the budgeting with the planning. The non-alignment of the budgets with the plans resulted in the municipality under-performing in terms of planned activities as well as spending patterns. Gaps in the planning and budgeting systems of the municipality were evident, as the findings indicated that budgeting was done separately at the finance department and planning was done elsewhere. Comparative studies of international countries indicate that with proper implementation of performance budgeting, organisations are in a better position to plan and budget at the same time. The recommendations from the study indicated that there was a lot that needed to be done by the Mafikeng Local Municipality to ensure that plans are aligned with the budget. The key recommendation of the study is that further research be conducted beyond 2011 in order to examine how far performance budgeting has progressed and to establish the opinion of the auditor general since the time of the study.