Thesis (MBA) -- Stellenbosch University, 2007. / ENGLISH ABSTRACT: The study was motivated by the widely reported problem of poor financial
management within South African local government and, more specifically,
the deteriorating status of revenue management, especially in medium to
smaller municipalities. The reasons for the alleged poor financial management
are complex and involve issues of management capacity, inappropriate
systems, and socio-economic circumstances. It is obvious that a holistic
approach will be required to address such a multi-ciimensional problem.
This research proposes to suggest solutions to the revenue management
problems facing South African municipalities. If this issue is not resolved
urgently, local government will impede service delivery rather than improve it.
Service delivery is key to the integration of South Africa's first economy into a
second economy.
The specific objectives of the research are; firstly, to develop a revenue
management value chain model specific for municipalities; and, secondly, to
conduct an analysis of the Lukhanji Local Municipality's financial status
against the value chain model. To attain the objectives of this study existing
literature and the scope of the problem must first be examined and
understood.
It is evident that the prevailing revenue management problem experienced, lie
with the local government themselves in terms of their inadequate financial
management. These problems have placed Significant pressure on
municipalities' cash flows and eroded their financial resources. In turn, this
has resulted in questionable sustainability and financial via bility, as the
problematic cash position of municipalities has impacted negatively on their
capital and maintenance expenditure. One of the greatest challenges facing
local government is the collection of revenue raised for services rendered to
various consumers. Of the various actions taken by government to address
the current crisis situation in municipalities in the short to medium term,
national grants to sponsor capital projects and services have been key in
Stellenbosch University http://scholar.sun.ac.za
iv
ensuring that the decrease in municipal expenditure has not been greater,
preventing the potentially disastrous consequences.
The Municipal Finance Management Act, together with the Municipal
Structures Act, Municipal Systems Act; and also the Constitution provide a
well -defined financial framework within which local government can function.
The research also reviewed all four main revenue sources of local
government, namely own revenue {utility fees and property tax}; subsidies
through intergovernmental transfers; loans; and private-sector equity. Despite
the improvement in intergovernmental transfers, it is important that all
municipalities maximise their own revenue, while considering those that
cannot afford basic services.
The research proposes the following revenue management value chain
model, specifically for South African municipalities:
Revenue
Planning Indigent
Management Tanff
Setling
~ Metering
Billing
Customer
Database
Management
Revenue
Coliection
I)
Credit
Control Loss
Management
In the analYSis of the Lukhanji Local Municipality's financial status against the
value chain model, it became evident that problems existed in all elements of
the value chain. General financial and viability assessments supported the
above finding and indicated financial difficulties and serious cash-flow
problems.
The research present several recommendations regarding the improvement of
poor financial management in South African municipalities and the Lukhanji
Local Municipality. However, in brief, urgent attention is required in terms of
the Lukhanji Local Municipality's cash-flow in the short term, while a
performance-driven culture needs to be developed in the long term.
Lastly, local government in general, and the Lukhanji Local Municipality
specifically, will succeed in improving their revenue management if they
harness the collective will and skills of all the stakeholders involved in the
provision of services. / AFRIKAANSE OPSOMMING: Die studie spruit voort uit die negatiewe publisiteit oor die probleem van swak
finansi~le bestuur in plaaslike regering en, meer spesifiek, die verslegtende
stand van inkomstebestuur, veral in mid del slag- tot klein munisipaliteite. Die
redes is ingewikkeld en behels probleme met bestuursvermo~, onvanpaste
stelsels, 'n kultuur van nie-hetaling, en sosio-ekonomiese omstandighede. 'n
Holistiese benadering is ooglopend nadig om die vee/dimensionele probleem
op te los.
Die doel van die navorsing is om by te dra tot die vind van oplossings vi r die
inkomstebestuursprobleme wat munisipaliteite in die gesig staar. Indien die
situasie nie dringend omgekeer word nie, bestaan die gevaar dat ons
munisipaliteite in bankrotskap gebring kan word , wat beteken dat hulle nie hul
grondwetlike verpligting sal kan nakom nie en dat hulle dienslewering sal
belemmer en dit verbeter nie. Goeie dienslewering is die sleutel vir die
integrasie van Suid Afrika se eerste ekonomie met die tweede ekonomie.
Die doelwitte van die navorsing is; eerstens, om 'n spesifieke
inkomstebestuurs-waardekettingmodel vir munisipaliteite te ontwikkel; en
meedens, om Lukhanji Plaaslike Munisipaliteit se finansiele status teen die
model te meet. Om die doelwitte te bereik moet die probleem vestaan word
deur bestaande literatuur te bestudeer .
Oit is duidelik dat die heersende inkomstebestuurs probleme h§ by die
plaaslike regering in terme van hul onvoldoende finansiele bestuur. Die
probleme het geweldige druk op munisipaliteite se kontantvloei gesit en
sodoende hul hulpbronne gedreineer. Oit het 'n vraagteken geplaas op die
volhoubaarheid en finansiele lewensvatbaarheid van munisipaliteite as gevolg
van die kontant probleme se negatiewe impak op die kapitale en
instandhouding bestedings. Een van die grootste uitdagings waarvoor
plaaslike regering te staan kom, is die invordering van inkomste wat gehef
word vir dienste wat aan verskeie verbruikers gelewer word . As dit nie vir die
Stellenbosch University http://scholar.sun.ac.za
vii
nation ale tussenregeringsoordragte, vir beide dienslewering en kapitaal
projekte was nie, sou munisipaliteite met baie erger probleme gesit het.
Die Wet op die Bestuur van Munisipale Finansies, tesame met die Wet op
Munisipale Strukture; die Wet op Munisipale Stelsels; asook die Grondwet
verskaf 'n goed omskrewe finansif!le raamwerk binne plaaslike regering.
Die studie behandel die vier vernaamste inkomstebronne van plaaslike
regering, wat eie inkomste (utiliteitsgelde en eiendomsbelasting), subsidies
deur tussenregeringsoordragte, lenings en privaatsektor-ekwiteit insluit. Ten
spyte van die verbetering van tussenregeringsoordragte vir sommige
jurisdiksies, is dit belangrik dat aile munisipaliteite huJ eie inkomste
maksimeer, met die fokus op diegene wat wei basiese dienste kan bekostig.
Die navorsing doen die volgende inkomstebestuurs-waardekettingmodel
spesifiek vir munisipaliteite aan die hand:
Inkomstebeplanning
Bestuur van
hulpbehoe- Tarief·
wendes vasstelling
C. Metenesing
Fakturering
Klante-
Databasisbestuur
Inkomsteinvordering
~
Kredietbeheer
Verliesbestuur
By die ontleding van die Lukhanji Plaaslike Munisipaliteit se finansiele status
teenoor die waardekettingmodel het dit duidel ik geblyk dat probleme in al die
elemente van die waardeketting bestaan. Die algemene finansiele ontleding
en finansiele lewensvatbaarheidsmodel ondersteun die bostaande bevindinge
en toon dat die Munisipaliteit in ernstige finansiele moeilikheid verkeer.
Die navorsing sluit verskeie onderling velWante aanbevelings oor die
verbetering van swak finansieJe bestuur in Suid Afrikaanse munisipaliteite en
die Lukhanji PlaasJike Munisipaliteit in. Die Munisipaliteit se kontantvloei het
veral dringende aandag nodig in die korttermyn, terwyl die Munisipaliteit 'n
kultuur van prestasiebestuur in the langtermyn moet ontwikkel.
Plaaslike regering oor die algemeen en die Lukhanji Plaaslike Munisipaliteit in
die besonder sal net in hul inkomstebestuur slaag as hulle die gesamentlike
wil en vermof!ns van al die belanghebbendes wat by die verskaffing van
dienste betrokke is, kan aanwend.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/19813 |
| Date | 10 1900 |
| Creators | Derbyshire, Kevin |
| Contributors | Kapp, C., Stellenbosch University. Faculty of Economic and Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Rights | Stellenbosch University |
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