Towards financial guidelines for sustainable quality service delivery for B-Class municipalities in the West Rand, Gauteng

Abstract

Service delivery and infrastructure development are the key issues that category B municipalities throughout the country are grappling with. The communities have lost patience with the government's promises of a better life for all since the first democratic elections in 1994. The root causes of these unfulfilled promises are manifold, and they continue to disappoint communities while they keep on voting for a ruling party, as if desperately hoping for a miracle. The challenges facing local government relating to service delivery, infrastructure development, management of working capital and rewards for municipal executives are detailed in this study with recommendations that can assist category B municipalities to drastically improve current conditions. The current management strategies and skills are not sufficiently effective, making it difficult for B-Class municipalities to deal with challenges in a proactive rather than a reactive manner with the latter appearing, to all intents and purposes, to be mainly unsuccessful. The primary objective of this study is to develop financial management guidelines that will ensure sustainable quality service delivery and infrastructure development for B-Class municipalities in the West Rand district of the Gauteng province. The secondary objectives of this study are: i. To consider guidelines for effective and efficient allocation of investment funds to meet IDP and other strategic objectives (a guideline that will ensure that optimal value is added to communities in the long term); ii. To develop guidelines to manage operating capital for sustainable financial viability; and iii. To develop guidelines from a financial perspective that will contribute to a culture of excellent performance and rewarding for best performance.” The study is presented in a series of three articles with each article related to a specific secondary objective. The empirical study measured business success and failure variables on a four-point Likert scale from a sample comprising class B municipal executives, management, councillors and provincial government as stakeholders. Two hundred and seven (207) questionnaires were received from the respondents of class B municipalities in the West Rand of Gauteng province in South African, namely Merafong City Local Municipality and Mogale City Local Municipality as well as from the Gauteng Provincial Treasury. The results show that six independent organisational success variables could be identified from the literature, namely: infrastructure investment; delegation of authority; credit control; inventory management skills; executive rewards strategy and community consultation. The dependent variables are infrastructure development; funding allocation; corruption; compliance to legislation, revenue collection and performance management. The criteria that measured each of the variables were determined and the variables, together with their measuring criteria, were integrated into a structured questionnaire for use by the selected sample individuals in the class B municipalities and the other stakeholders. The data was tested for reliability using the Cronbach Alpha coefficient, the questionnaire was validated using the Kaiser-Meyer-Olkin test for sample adequacy and the use of the exploratory factor analysis method, was validated using Bartlett's test of Sphericity. The results obtained indicated that the questionnaire is valid for use to measure business success and failures in the local sphere of government in Gauteng province's West Rand region in South Africa. The results validated the identified variables, while also showing that some of the variables were dualistic in nature. Some variables were discarded due to unsatisfactory reliability coefficients. The descriptive statistics were used to depict the organisational success or failure of class B municipalities in the West Rand of Gauteng province in South Africa. The mean results for organisational success or failure to develop infrastructure and allocate funds to infrastructure development in as far as the above-mentioned municipalities are concerned, portrayed a general dissatisfaction (results below the parameters of 60 percent). This suggests that a lot still needs to be done in the class B municipalities, specifically in the Gauteng province in South Africa, to achieve infrastructure development investment goals. This reflects the relevance and the importance of research underlying the successful measurement of an organisational approach. The findings revealed that variables that have the least bearing or effect on organisational success have mean results of below 0.5. On the other hand, the organisational success in infrastructure investment, community consultation and executive rewards strategy for class B municipalities reflect the highest mean results of 2.63, 2.70 and 2.71 respectively, requiring the implementation of recommendations as an urgent matter of intervention. All the identified variables require management attention in this regard. Other important recommendations are also made. Investment in promoting attitude and mind-set changes and encouraging excellent customer services are vitally important for a successful organisational turnaround. The appointment of qualified and experienced municipal councillors, executives and management will boost public confidence in their ability to understand their roles and responsibilities and what is expected of them in terms of service delivery and infrastructure development. A culture of service excellence needs to be created among all the relevant parties to strengthen and improve municipal competency. There is also a need to explore performance reward schemes and systems for executives in other industry sectors in order to address the shortcomings identified in this study. Open communication and financial viability are equally important in promoting organisational success and improved public confidence. The communication with the public and other stakeholders using the latest technology, will help municipalities to stay relevant and keep ratepayers and consumers abreast of any planned developments or changes coming their way. In this way, resistance to change arising from a lack of or delay in communication can be overcome (Chummun, 2012). Lastly, there is a need for review by the Department of Cooperative Governance and Traditional Affairs (COGTA), of municipal legislation pertaining to executive's rewards and municipal councillors' minimum educational and managerial experience.