Adoption of combined assurance within supply chain management in the Cape Winelands district of South Africa

Abstract

This study examines the adoption of combined assurance within municipalities and its impact on Supply Chain Management (SCM). The research involved ten representatives from the Cape Winelands District Municipality of South Africa, who oversee over 200 staff members. The study found that the internal audit function (IAF) in the municipality is functioning well, with the board/council, audit committee, management and external auditors supporting its growth. The majority of research participants agreed that the key elements of Supply Chain management were in place. The role of internal auditors in the adoption of combined assurance within the public service was also discussed, with most participants agreeing or strongly agreeing with the statements. The study found that the Chief Audit Executives (CAEs) understand the theory of combined assurance, regularly explaining its purpose, authority and responsibility to the municipality’s Council and senior management. Major risks identified in the audit include non-compliance with local content and production requirements, non-compliance with SCM regulations and calculations on Preferential Procurement Policy Framework Act points. The study recommends enhancing the effectiveness of SCM through the adoption of the combined assurance model, furthermore, optimised personnel management, increased education and training implementation and promotion and reward based on human resources (HR) needs. The study focuses on promoting good governance in local government by establishing oversight structures with individuals with the necessary skills and knowledge. These structures should monitor the organisation's performance, ensure appropriate consequences for failures, implement audit action plans, monitor risks and establish an ethical and responsible decision-making culture. To attract and retain good talent, leaders should implement effective HR systems that facilitate the recruitment and retention of skilled personnel. These HR systems should nurture continuous talent development and cultivate a culture of high performance. Clear and implementable audit action plans should be developed based on the Auditor General's report, subject to rigorous review by regulatory bodies. A comprehensive compliance framework should be established, covering all relevant legislation, and monitored by governance structures. Future research areas include semi-structured interviews or focus groups, longitudinal studies tracking the adoption of combined assurance in municipalities, exploring suitable SCM metrics and measurement systems at the municipal level, and exploring the use of artificial intelligence (AI) in SCM. The study's limitations include its limited sample size and cross-sectional research design, that was susceptible to the broader context of the Cape Winelands District Municipality during the time of data collection. However, the study can serve as a best practice case for other municipalities in improving SCM risk management and performance.