The role of municipal officials in financial crimes and the effects thereof: A conceptual framework to combat financial crimes in South African municipalities

Abstract

The laws that govern financial management in South Africa are ignored by municipal officials at all levels. The disregard of statutes by municipal officials is a norm rather than an exception. As such, poor financial management controls and effective application of legislation put municipalities under enormous financial pressure. These predicaments have a negative impact on the provision of services to citizens; therefore, it is imperative that the finances of municipalities are managed and handled with diligence. This study aimed to propose a conceptual framework to assist municipalities in implementing financial controls to combat and deal with financial crimes. The study used a qualitative approach in the form of desktop and secondary data analysis. The study found that municipal employees disregard legislation such as the Municipal Finance Management Act 56 of 2003 when it comes to financial management, and as such public funds are constantly abused by municipal officials. The study concludes that financial crimes negatively affect the financial performance of municipalites, ultimately affecting the delivery of services. On that note, the study recommends stricter financial management controls and the enforcement of laws and policies. This study further recommends municipalities that are found to have mismanaged finances should be referred to Financial Intelligence for futher invesigations.