An analysis of financial viability on municipalities in the North West province : the case study of Mafikeng local municipality

Abstract

Local Government in South Africa has undergone much transformation since the year 2000. Although much of the change has been to correct imbalances, inequities and disparities within our local communities as a result of apartheid, change has also been motivated by the National Government's realisation that, as with governments throughout the world, there is a need to modernise all spheres of Government. Part of this transformation process at the local government level in South Africa has been to ensure that municipalities become more responsive to the communities' needs. The guiding principles for this transformation are contained in the White Paper on the Transformation of the Public Service (1995) and the Batho Pele White Paper (1997). This has informed the Municipal Systems Act: Act 32 of 2000 of which Chapter 6 determines that municipalities will have a Performance Management System to promote a culture of Performance Management amongst the political structures, political office bearers, councillors and administration. The Performance Management System must ensure that the municipality administers its affairs in an economical, effective, efficient and accountable manner. A literature review contained in this research, indicates that nationally, ensuring effective and efficient Financial Management Systems at the local government level is impacted upon by a number of factors such as the organizational culture of an institution and its revenue base. This research ends with recommendations for further research and it is argued that each organization has its own unique organizational problems impacting on its financial status. The conclusion is that no single typology, as contained in the literature, can account for the specific impact financial viability has on service delivery and organizational existence at the local government level in South Africa. Consequently, implementers of the financial strategy and other financial management policies must assess the unique characteristics of each organization prior to implementation thereof, in order to evaluate its impact on the organizational culture and other variables.