An Overview of Poor Financial Reporting and Lack of Accountability Within the South African Local Government

Abstract

This study explores the impact of inconsistent financial reporting and lack of accountability with specific reference to the current financial situation of the South African local government. The main objectives of the study are to investigate the challenges of financial reporting, lack of accountability, and possible mechanisms to address the financial reporting and lack of accountability within local government. The study explores the key mechanisms for strengthening accountability. The paper examines the municipal financial management and accountability cycle. It further examines the purpose of reporting standards and financial reporting. The study outlines the objectives of financial statements and the challenges of financial management within local government. The paper explores municipal finance control that entails an annual cycle that includes four broad activities which are planning and budgeting, implementation and spending, and monitoring and evaluation. Despite the legislative framework regarding the financial management of the municipalities in South Africa, lack of accountability is still a fundamental problem regarding the eradication of corruption. The study demonstrates the effects of how an accountability failure negatively affects municipalities. The study adopted the conceptual approach relying heavily on secondary data to demonstrate the impact of poor quality of submitted financial statements and performance reports as well as the lack of accountability in local government. The study concludes by adopting the consequence management as a control measure that will enable the local government to address corruption and lack of accountability related issues.