Consequence management for minimising financial mismanagement in the City of Johannesburg Metropolitan Municipality

Abstract

The study aimed to assess whether consequence management concerning municipal financial management in the local sphere of government is adhered to. There are regulatory bodies, such as the Office of the Auditor-General, Financial DC Boards, Internal Audit, Audit Committees and Oversight Council Committees, which mandated both constitutionally as well as legislatively to ensure that public financial reports, which include recommendations are provided on the municipal performance. Despite the annual recommendations, most South African municipalities still fail to manage public monies properly, which result in a worrying increase in irregular, unauthorised, fruitless, and wasteful (IUFW) expenditure.The CJMM was used as a focus case study to observe the extent to which municipalities comply with consequence management. In doing so, the study utilised a qualitative research approach, that is, secondary data was gathered from, inter alia, municipal audit reports, financial statements, consolidated general reports and accredited journal articles. The adopted research methodology was utilised to analyse audit reports from 2018 - 2022 to provide a descriptive analysis of how the CJMM utilised its finances. The findings revealed an increase in financial mismanagement because of by non-compliance with legislation, lack of performance management, and poor governance and leadership. The Auditor-General of South Africa (AGSA) often highlights these factors as a problem for municipalities. The study also provides recommendations to retain these components to both control financial mismanagement and adhere to the principles of consequence management.