A retrospective financial sustainability assessment of local municipalities in Overberg district (2009 - 2019)

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Date

2024

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Publisher

University of the Western Cape

Abstract

The future existence of municipalities will be determined by their ability to remain financially sustainable in an increasingly constrained economic and politically volatile environment in their quest to provide and maintain quality and affordable services to all the residents within their jurisdiction. The State of Local Government Report (SLGR) as far back as 2009, states that financial management in municipalities is extremely challenging. It identifies poor governance, a weak skills base, inadequate provincial support, abuse of power, fraudulent activities, and weak revenue bases as well as the increasing reliance on government grants and poor debt collection as issues that negatively influence sustainable service delivery. The above statement remains true about sustainability within most municipalities currently in South Africa, taking the findings of the latest report on the State of Local Government Finances and Financial Management (SoLGF) into account. The main purpose of this study was to do a financial assessment with specific reference to the sustainability of the four local municipalities within the Overberg District Municipality (ODM), namely Cape Agulhas (CAM), Overstrand (OM), Swellendam, and Theewaterskloof (TWK) from 2012 to 2019. This was done by measuring the actual performance of these municipalities against the financial health measures identified by National Treasury (NT) for municipalities over the period under review. The results of this assessment together with that of the financial ratios used by the Auditor-General of South Africa (AGSA) and NT in their assessment of municipal finances allowed the researcher to reach a cognisant conclusion. The study was augmented with the analysis of the information gained from the interviews conducted with the political and administrative leadership of each municipality

Description

Philosophiae Doctor - PhD

Keywords

financial sustainability assessments, local municipalities, overberg district, financial management, municipal budget

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