Governance shortcomings at the root of service delivery problems

Governance shortcomings are at the root of service delivery problems in provincial and local government in South Africa and strengthening governance and accountability will help to solve this problem.

Prof Parmi Natesan, CEO of the Institute of Directors in South Africa (IoDSA), points out that South Africa’s local and provincial governments are central to delivering essential services and fostering socio-economic development.

“However, a series of recent media reports revealed significant shortcomings. Mismanagement of public funds, failure to deliver basic services and a lack of effective leadership indicate a deeper governance crisis. While King IV covers governance best practice, a failure to apply its principles has presumably contributed to these challenges.”

Corruption at Rustenburg Local Municipality reportedly surrounds the leasing of land and unauthorised connections to municipal services, costing millions of rands, not only undermining the financial stability of the municipality but also leaving the community vulnerable.

A questionable payment of R2 million by the Joe Gqabi Municipality meant for VIP toilets reportedly disappeared after a contractor provided no services. Natesan says the reported involvement of a municipal official in the company that received these funds points to severe gaps in governance controls and accountability.

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Also governance shortcomings at provincial level

“Governance shortcomings at the provincial level are just as concerning, with recent reports revealing that the Gauteng Legislature struggled to recover irregularly pocketed funds by MPLs [members of the provincial legislature] and staff.

“In addition, there were delays in Mpumalanga to provide learning materials to under-resourced schools. Leaving students unprepared for final exams.”

Across the country, she says, municipalities in the North West, Free State and Eastern Cape reportedly owe water boards over R11 billion and essential municipal infrastructure grants have apparently been returned to the National Treasury due to underperformance.

The eThekwini metro municipality faces a prolonged water crisis, with contradictory figures being cited for the cost of repairs. At different points, the metro claimed it required R110 billion, R130 billion and most recently, R44 billion to address infrastructure backlogs.

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Questions about competence of those in charge

Naturally, Natesan says, this raises questions about the competence and financial acumen of those in charge.

“A critical aspect of good governance is the role of boards and audit committees to maintain accountability and oversight. King IV emphasises that these structures play a key governance role.

“Audit committees are specifically mandated to oversee financial reporting. The reported financial mismanagement and irregularities in municipalities indicate that these structures have not fulfilled their oversight duties adequately.”

The Auditor-General’s recent consolidated report on local government audit outcomes again highlighted significant shortcomings across municipalities. The findings indicate that “local government is losing billions of rands each year due to poor decisions, neglect or inefficiencies”.

Fruitless and wasteful expenditure increased to R7.41 billion, with municipalities disclosing R27.59 billion worth of irregular expenditure. The report lists audit committees as key role players in the accountability ecosystem for “providing an independent view of the effectiveness of municipal controls and processes”. 

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Councils and councillors can play big role in accountability

In addition, the report notes that the councils also play a significant role in “investigating and dealing with unauthorised, irregular and fruitless and wasteful expenditure, fraud and corruption and any transgressions and non-performance”.

Natesan says a significant governance concern contributing to these challenges is the practice of cadre deployment. “Reports indicate that politically connected individuals are often appointed to leadership positions in the public sector, prioritising loyalty over competence and ethics.

“While cadre deployment is often defended as a means to ensure political alignment, it has reportedly undermined professionalism and weakened institutional capacity in local and provincial governments.

“This issue has been extensively scrutinised, with the State Capture Commission finding that cadre deployment is both unconstitutional and illegal, as it compromises merit-based appointments and erodes accountability.”

Natesan points out that King IV advocates for leadership appointments based on merit, integrity and competence. “Appointing leaders with the necessary skills and commitment to public service is critical for ensuring accountability and driving effective governance.”

She says this aligns with the continuous advocacy efforts of the Institute for the professionalisation of directors through enforced membership of and certification by the professional body.

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Professionalising and capacitating local government

The Auditor-General’s report also highlights the need for professionalising and capacitating local government, stating that “skills and capacity gaps can be addressed through a concerted effort to support and implement local government professionalisation initiatives.”

She says it is therefore important to implement King IV for better governance. “Despite the challenges, King IV offers a roadmap for overcoming these governance concerns. The Code, when applied effectively, can help local and provincial governments improve control, accountability and ultimately service delivery. At its core, King IV calls for leadership grounded in integrity, fairness and transparency.”

Furthermore, Natesan says, internal controls are crucial for financial oversight. “By adopting King IV’s practices on performance, reporting and assurance municipalities and provincial governments can ensure that public funds are spent efficiently.

“It is also important that boards and audit committees take a more proactive role in holding management accountable. By enforcing financial controls and regularly reviewing governance practices, these structures can prevent future mismanagement.”

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Challenges with governance shortcomings can be overcome

She says although the governance challenges in South Africa’s local and provincial governments are significant, they are not insurmountable. “By fully embracing the principles of King IV, municipalities and provincial governments can improve their performance, enhance service delivery and restore public trust.

“Improved governance will lead to better resource management, increased socio-economic development and more equitable access to essential services. Ultimately, South Africa’s future depends on the ability of its government entities to be governed effectively.”