Fiscal Discipline and the Successful Completion of Municipal Projects: The Case of City of Tshwane

Abstract

Kaiser, Crother, Kelly, Luiselli, O’Shea, Ota, Passos, Schleip and Wuster (2013) have shown the relationship between fiscal discipline and the successful completion of municipal projects in Sub-Saharan African countries. The study aims to assess and evaluate the degree of fiscal discipline exercised by employees of the City of Tshwane on municipal finance. Financial practitioners working in the City of Tshwane are required to comply with regulations and guidelines stipulated in the South African Municipal Finance Management Act (Act number 56 of 2003). Data was collected from a stratified random sample of 146 employees of the City of Tshwane who were responsible for providing financial services to customers. Data was collected by using a structured, pre-tested and validated questionnaire of study. Statistical methods such as frequency tables, cross-tab analyses and ordered probit regression were used for performing data analyses. Efficiency in financial management was assessed by assessing the degree of adherence of employees to the Municipal Finance Management Act (MFMA) based on a composite index defined by Kaiser, Crother, Kelly, Luiselli, O’Shea, Ota, Passos, Schleip & Wuster (2013). The study showed that 89% of the 146 employees who were selected for the study demonstrated adequate adherence to the Act, whereas 11% of employees failed to do so by the same standards. The study found that the degree of adherence of employees to the MFMA was significantly influenced by 3 factors. These 3 factors were degree of skills in financial accounting and auditing, duration of service, and degree of job satisfaction, in a decreasing order of strength. The results indicated a robust association between fiscal discipline and the successful completion of municipal projects.