Financial mismanagement and efficiency trade-off in local municipalities: Lessons from Eastern Cape, South Africa

Syden Mishi, Nwabisa Mbaleki, Farai B. Mushonga
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引用次数: 3

Abstract

Background: Local governments are considered an essential part of interpreting and integrating laws and policies at the local level. There is a growing realisation that the success of local government is vital to alleviating poverty and delivering services to communities. However, financial mismanagement as per audit reports has affected a number of local authorities and continues to be a hindrance to progress.Aim: This study was set to investigate the level of efficiency in each municipality and how financial mismanagement (unauthorised, irregular, fruitless and wasteful expenditure) influences that efficiency.Setting: The study considered all local municipalities within the Eastern Cape province of South Africa, using publicly available data on each municipality’s performance and financial management. The data available and utilised are for the financial years 2012–2015.Methods: The study used a non-parametric linear programming-based technique to compute efficiencies, with the local municipality being the decision-making unit. The implications of financial mismanagement on efficiency are determined in a second-stage regression model with the use of panel tobit regression.Results: We found that the mean efficiency ranges between 0.407 (moderate) and 0.724 (high) in general, however, with greater variation across municipalities. Fruitless and wasteful expenditure and unauthorised expenditure negatively affect the total effciency scores. Irregular expenditure has no statistical effect on efficiency, arguably because of the nature of this financial mismanagement being expenditure that may be for a good cause but not approved procedurally.Conclusion: There is room to increase efficiency in studied municipalities, especially by reducing wasteful expenditure and unauthorised expenditure. The Public Finance Management Act provides astute guidelines that will bring efficiencies in municipalities; however, a review may be necessary to be progressive. The South African Local Government Association and Cooperative Governance and Traditional Affairs Department must capacitate municipalities and work with the auditor general to implement audit recommendations.
地方市政当局的财务管理不善和效率权衡:南非东开普省的经验教训
背景:地方政府被认为是地方一级解释和整合法律和政策的重要组成部分。人们越来越认识到,地方政府的成功对于减轻贫困和向社区提供服务至关重要。然而,审计报告所指出的财务管理不善已影响到一些地方当局,并继续阻碍进展。目的:本研究旨在调查每个城市的效率水平,以及财务管理不善(未经授权、不规范、无果和浪费的支出)如何影响效率。环境:该研究考虑了南非东开普省的所有地方市政当局,使用了有关每个市政当局绩效和财务管理的公开数据。可用和使用的数据是2012-2015财政年度的数据。方法:研究使用非参数线性规划为基础的技术来计算效率,与当地市政当局作为决策单位。财务管理不善对效率的影响是确定在第二阶段的回归模型与使用面板tobit回归。结果:我们发现平均效率范围在0.407(中等)和0.724(高)之间,然而,不同城市之间的差异更大。无果和浪费的支出和未经授权的支出对总效率得分产生负面影响。不正常的支出在统计上对效率没有影响,可以说是因为这种财务管理不善的性质可能是出于正当理由,但未经程序批准的支出。结论:所研究的城市有提高效率的空间,特别是通过减少浪费的支出和未经授权的支出。《公共财政管理法》提供了精明的指导方针,将提高市政当局的效率;然而,为了进步,审查可能是必要的。南非地方政府协会和合作治理和传统事务部必须使市政当局具备能力,并与审计长合作执行审计建议。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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