Examining the organizational management failures resulting in irregular expenditure : a case of Tswaing Local Municipality

Abstract

The financial reports presented by the Auditor General of the North West province have confirmed the existence of some irregular, unauthorized , wasteful, fruitless and under expenditures in many financial years. This study aimed at identifying and establishing the organizational management failures resulting in irregular expenditure in Tswaing Local Municipality. The study adopted a social constructivist paradigm which enhanced adequate understanding of participants' opinions, traditional and social understanding of the phenomenon under study through interactions. A qualitative approach was applied as well as an exploratory design which enabled the researcher to use diverse methods such as document enquiry and interviews to determine the historical and actual cause of the study problem . The population of the study consists of 69 municipal financial workers and 6 senior managers selected for interviews using a purposive sampling method and the study also recorded a 100% response rate. Data were analysed using the Statistical Package for Social Sciences (SPSS). The study identified factors such as inability to follow competitive tender processes, inability to follow procedures in spending financial resources and inability to comply with the financial and treasury regulations as the factors that result in the irregular expenditure in the Municipality. Other factors such as the inability to conduct adequate internal control measures, benchmarking, budgeting , risk management, auditing, financial reporting , adequate planning, and other human resource problems are established as the organisational management failures that lead to irregular expenditure. The study recommends, among others, that the municipal role-players should follow financial regulations and procedures, tender process bids, as well as conducting variance analysis, auditing, internal control measures and benchmarking while disciplinary actions, expulsion and legal actions should be taken against culprits to reduce fraud in the Municipality.