Academic journal article Journal of Finance, Accounting and Management

Accountability and Transparency: Procurement Issues in Selected Municipalities in South Africa

Academic journal article Journal of Finance, Accounting and Management

Accountability and Transparency: Procurement Issues in Selected Municipalities in South Africa

Article excerpt

Introduction

Governments are created by people to serve the people. In order to serve its citizens effectively, the government is obliged to interact with different people it is obliged to serve. People belong to different interest groups, and depending on particular needs, these groups are found where issues related to, for instance, politics, economics, social needs and technology are attended to. Public financing is time and place bound and therefore unparalleled to a specific state or community. Time and place which comprises of the environment however have a decisive influence on the nature and scope of public financing for a specific environment. According to Meiring, (2001) the environment is seen as the total reality within which the human being finds himself, and which is more than just the physical environment. The rendering of public municipal services most importantly procurement and supply chain management takes place in a unique environment which is continuously changing and which thus has a continuous influence on the rendering of public municipal services and any administrative measure being made to satisfy a specific problem.

A significant aspect to be considered is the way of life and thus the welfare of people and how the individual and society as a whole relate to the environment. It can therefore be argue that any human being is a product of his immediate environment, the interaction with such environment will influence and will continuously endeavour to change or influence the environment to make it a better place to live. The relationship between human beings and the environment is based on common influence. The influence of environmental factors on public financing and supply chain is of specific importance because the environmental factors not only influence the origin, demand and rendering of public services, but also the financing of such services (Van Der Waldt & Du Toit, 1999).

South African procurement and supply chain management legislative framework aims at creating the basis for viable local government, making individual municipalities responsible for the delivery of services that the public expect and ensure that taxpayers receive value for money. In order to deliver public services, municipalities are encouraged to engage suitable service providers to conduct business on its behalf or to deliver certain goods and services. It is for this reason that municipalities should have sound procurement procedures and systems to deal with issues pertaining to the purchasing and acquiring of goods and other services. Supply-chain management seeks to breach the gap between traditional methods of procuring goods and services and also addressing procurement-related matters that are of strategic importance.

In the nature of government operations, business is conducted through a series of processes and transactions involving different persons at different stages. In the process, different units have to work together. Hence, contacts are established between officials in different departments and units. While this may assist in the expeditious processing of government business, it may also have the unintended consequence of fostering relationships conducive to lack of accountability, transparency, financial fraud and corruption, which are a major challenge(s) facing municipalities today.

Against this background, this paper explores the procurement practices among selected municipalities in South Africa with emphasis on accountability and transparency among chief officials of the municipalities towards effective and efficient service deliver. The motivation for this objective stems from the delivery of services at minimum cost and impact on desired consequences. The purchasing and disposing function of municipality is an area that is particular vulnerable to fraudulent activities as it usually involves contact between employees and external agents, and it is thus the primary risk area for misappropriation by both employees and bidders. …

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