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Abstract - Exploratory Review of State-Owned Entities: Going Concern Problem
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Abstract: The need for effective governance at state-owned entities continues to be emphasised by ongoing revelations of scandals involving pervasive corruption and wasted resources. This paper provides a critical review of state-owned entities, based on the going concern concept, for the period 2014 to 2018. The paper does so by reviewing the standard functions of board committees in the areas of responsibility, competencies, transparency, accountability and performance. The research methodology employed in this article includes content analysis. The paper focuses on the cases of South African Airways, the South African Broadcasting Cooperation, the Passenger Rail Agency of South Africa and Eskom. Thus, this paper reveals that state-owned entities are suffering from weak balance sheets and negative equity; liquidity challenges; negative publicity; unhelpful board dynamics; loss of confidence from key stakeholders; forensic audit reports pointing to corruption, and a failure to recognise that oversight committees are not an end in themselves, but a means to achieve effective governance. The paper further reveals that the challenges facing board committees include political pressure and the lack of continuity and accountability. Keywords: Board committees, public entities, governance, accountability, going concern. |
Abstract - Is the Quality of Governance a Good Pointer to the General Economic Health of the Country?
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Abstract: Good governance is believed to be instrumental in facilitating an environment for sustainable economic growth, especially for developing countries. It is no surprise that there is a growing public interest in the interplay of political and economic systems in South Africa. The chief concern is that the country is plagued by a couple of economic challenges such as sluggish gross domestic product (GDP) growth, poverty, lack of service delivery, poor financial management, weak business confidence, massive unemployment, and corruption are threats to the economic growth. It is generally believed that good governance would minimize persistent ills of the economy and ultimately pave the way for restoring economic growth. But is the quality governance the principal stimulus of a country’s economic growth? This is the chief questions which this article will attempt to answer. Based on the good governance and neoclassical growth theory, and good governance theory, this article seeks to analyse and evaluates the impact of the quality of governance on the growth of the economy in South Africa. Keywords: Corruption, Economic growth, good governance, neoclassical and poor governance. |
Abstract - Outsourcing and Tendering Complexities in the South African Public Sector Institutions: A Demise of New Public Management Theory?
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Abstract: The provision of public service, which is traditional provided by the government institutions, through a private institution is prevalent in most developed and developing countries. Generally, most government institutions outsource the provision of public service and procure goods through a tender process. According to the new public management theory, outsourcing of traditionally government-provided services can result in major cost savings. However, in South Africa, evidence suggest that outsourcing and tendering present several challenges in the public sector institutions. In fact, South Africa loses between R25-R30 billion of the annual government procurement budget due to corruption associated with outsourcing and tendering. In this regard, the most common pathologies relating to outsourcing and tendering are collusive bidding practise, patronage, kickbacks, bribery and flouting of procurement legislation, regulations and policies. As a result, most public sector institutions are plunged into financial crisis and inefficiencies. Moreover, large amount of taxpayers’ money cannot be accounted for due to rent-seeking behaviour. In view of the arguments above, this paper discusses the various complexities linked with outsourcing and tendering in the South African public sector institutions. To this end, different scholarly articles, the official reports of the investigative institutions in South Africa were consulted. This paper concludes that the challenges presented by outsourcing and tendering in government institutions foreshadow a demise of the new public management theory. It is recommended that public sector institutions in South Africa need to consider building state capacity, introduce proper monitoring and evaluation systems in procurement and ameliorate governance and compliance with legal statutes, regulations as well as policies. Nevertheless, this could be achieved successfully through building capacity in the public sector institutions. Keywords: Contracting, corruption, outsourcing, procurement, tendering. |
Abstract - Democracy, Governance and Power Transfer in Post Colonial Africa: Examining Military Intervention in Zimbabwe
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Abstract: The article conceptually examines the political role played by the military in aiding the transition and eventual transfer of power in Zimbabwe after the 37 year rule by veteran nationalist Robert Mugabe in November 2017. It reflects on Mugabe’s presidency and the implementation of controversial macro-economic policies which led to an unsustainable government with the highest inflation and unemployment levels in non-conflict zones globally. Due to Mugabe’s old age and fragile health, political posturing and opportunism had become rife in the ruling ZANU PF party leading to purging and possible anarchy. This invoked discontent within the army ranks who subsequently intervened, ostensibly to deal with corrupt elements around the presidency. Social contract theory was adopted to explicate the relationship between the Zimbabwean leadership and the masses in the context of good governance. Both broadcast and print media reports were used to provide narrative evidence regarding the military’s actions. Reference to policy documents was done to examine the effect of the military intervention by the Zimbabwe Defence Forces (ZDF) on civil society, government and ZANU PF in the context of constitutional imperatives. The article argues that, despite its controversial outlook, military intervention may provide a fresh impetus in the power transfer dynamics in Africa, particularly where leaders have overstepped their social contract with the people. Keywords: Democracy, governance, military, power, Zimbabwe. |
Abstract - Do Poor Financial Performance Indicators Affect Municipal Grants Budget Allocation in South Africa?
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Abstract: The Auditor-General South Africa (AGSA) Report for the 2017/18 financial year-end indicates that 87 per cent of municipalities failed to achieve clean audits, quoting a lack of robust internal control and poor financial management, lack of accountability and consequences for non-compliance as causes. The report further highlighted the three statutory areas of poor financial management; irregular expenditure, wasteful and fruitless expenditure, and unauthorized expenditure. This paper intends to explore how the national government in South Africa allocates budgets to municipalities and aims to identify whether there is a consideration of municipality performance when allocating grants. A qualitative study was conducted, and there was a review of secondary data to explore the budget allocation and actual spending of municipalities. In addition to the secondary data review, the relationship between the municipal grants allocation and the three areas of poor financial management were analysed through correlation analysis as per data extracted from the South African National Treasury (NT) budget allocation, and the AGSA reports. The study identified municipalities which have been the top contributors in poor financial management for four (4) years between 2014/15 to 2017/18 financial years (FY). Furthermore, the study identified the type of audit opinions received by the respective municipalities. Lastly, the study identified whether there is a correlation between municipalities' previous year’s performance and future performance about the allocation of grants by the NT. The results of the study demonstrated that there is no significant relationship between national grant allocation and actual spending of municipalities. This indicates that the South African NT does not use performance-based budgeting when allocating grants to municipalities. The paper recommends the use of effective performance budgeting to promote accountability. The use of performance budgeting will improve transparency, effective mechanisms and good practices which might enhance the performance of municipalities and result in accountability and the possible achievement of clean audit reports. Keywords: Accountability, Audit Reports, Municipalities, Performance Budgeting, Poor Financial Management. |