Critical evaluation of service delivery in selected South African municipalities: the role of budget management

Abstract

Over past decades, the local government sphere has been the most important sphere of government for delivering crucial services to citizens to advance their quality of life. However, in many cases, South African municipalities have failed to render these services efficiently due to lack of effective budget management. As a result, funds are returned to the fiscus each year, having a detrimental influence on residents' quality of life. The quality of service delivery is enhanced by proper and effective management of budgets and optimal utilization of resources which involves spending all appropriated funds to provide services as required by the constitution of South Africa. The aim of this study was to understand the difficulties experienced by municipal officials and to develop a framework to guide management and employees of municipalities in budget management. The study adopted a mixed methods research approach. A research survey was conducted in three South African municipalities in the Free State, Western Cape and Eastern Cape. A statistical package (SPSS AMOS 26) was used for data analysis for the quantitative approach. An exploratory factor analysis was conducted to identify the key factors that impact budget management. In addition, Structural Equation Modelling (SEM) was used to determine the model fit indices and test the significance of relationship among the key variables. The qualitative data from the interviews was analysed using content analyses. The results revealed that risk management, cash flow management, revenue and expenditure management, legislative consideration and budget planning have significant impact on effective budget management. It is argued that the proposed framework, developed in response to these results, enables new insights into the challenges of public management. It also contributes a useful and practical guide for use by the municipalities in which the research was conducted and for local government throughout South Africa regarding effective budget management. Ultimately, the application of this framework has the prospective to significantly improve citizens' quality of life.