**1. Introduction**

Accountability refers to 'being answerable for one's behaviour or actions' [1, 2]. Financial accountability describes the process accounting by officials of the manner in which public funds, in this case, at local government or municipal level, have been used to implement municipal policies as approved by its council [2, 3]. In a 2019 media release by the Auditor-General South Africa (AGSA), the lack of accountability was flagged as the major cause of poor local government audit results in South Africa [4].

The AGSA reports on municipal performance have consistently over the years highlighted governance issues affecting municipalities; however, analysis of the audit result trends over the period 2015/16−2021/22 demonstrated limited action on recommendations by the AGSA to address the identified shortcomings. According to AGSA, widespread monitoring and control breakdowns were found at a significant number of the 257 municipalities within South African local government environment [5], resulting in fiscal resources either misused or misappropriated or not appropriately accounted for as required by South African public finance management laws. 'Evidence of these is largely incomplete projects, unsupervised projects, lack of maintenance of significant service delivery infrastructure and haphazard road maintenance projects and infrastructure' [4].

#### **2. Corruption contextualised**

The Prevention and Combating of Corrupt Activities Act 12, 2004 (PCCAA) criminalises corruption in South Africa [6]. The PCCAA, as cited by Bernstein and Shaw, defines corruption as 'where an individual either directly or indirectly receiving or giving an intention to receive a form of gratitude from another individual or offers or approve to provide a gratitude to some other individual for his or her benefit or for another, and the offering or acceptance is conducted in order to influence the other party to perform in an inappropriate way, in the functioning of that individual's duties [7]'.

As a member state to the New Partnership for Africa's Development (NEPAD), South Africa prescribes to its strategic priorities, which amongst others require adherence to good governance values including but not limited to political, economic and corporate governance [8]. Poor levels of corporate governance, resulting in corruption without apparent and decisive consequence management, are currently some of the issues dominating the news and public discourse in South Africa and beyond its borders.

The Constitution of the Republic of South Africa, 1996, with specific reference to Section 195, prescribes public administration governance in line with democratic values and principles, being '(i) the promotion of a high standard of professional ethics; (ii) the promotion of efficient, economic, and effective use of resources; (iii) transparency must be fostered by providing the public with timely, accessible and accurate information; and (iv) public administration must be accountable [9]'. These values and principles embody the aspirations of sound corporate governance.

Corporate governance embodies processes and systems by which corporate enterprises are directed, controlled and held to account. The Institute of Directors of South Africa [10] defines corporate governance as 'the exercise of ethical and effective leadership by the governing body towards the achievement of ethical culture, good performance, effective control and legitimacy'.

## **3. Methodology**

This chapter is based on an exploratory desktop literature review of numerous publications, such as academic journals, official South African public sector reports and publications, legislation and policies, newspaper articles, as well as documentation obtained from various official websites in the field of public governance and accountability. Comprehensive insight was gained from the analysis of the documents into the current governance frameworks versus the situation pertaining to

*Addressing the Endemic Consequences of Corruption in the South African Local Government… DOI: http://dx.doi.org/10.5772/intechopen.108154*

the prevention and/or addressing of corruption within the South African Local Government Public Sector.

Analysis of the literature reveals numerous intricate and well-designed frameworks, mechanisms and public institutions in place to firstly prevent acts of corruption and mismanagement of resources and secondarily to deal with such acts, should they occur. As revealed by the various AGSA municipal audit reports, a lack of consequence for mismanagement of resources evidenced by the failure to investigate findings and/or failure to act on findings resulted in deterioration of the financial health of municipalities and in the delivery and maintenance of municipal infrastructure.

A qualitative research approach using unobtrusive methods was used at it was viewed as being the most suitable approach towards understanding and unpacking public sector corruption and consequence management practices in South Africa. As stated by Auriacombe [11], 'a theoretical framework is essential to gain a clear understanding of the relationships manifested between the various elements and issues of an identified phenomenon', which in the case of this study is the public sector and public financial management and accountability.

All the documentary sources used in this study are available in the public domain and easily accessible, which allowed for a detailed contextual and content analysis. The focus was on official publications which would ensure validity and trustworthiness, such as the Auditor General's reports and peer-reviewed journals pertaining to the subject matter at hand. A process of analysis of the phenomenon (public corruption and consequence management), reflection and synthesis to make meaningful deductions was followed towards creating the information and positioned in the article. After analysis of the trustworthy sources [12], the authors were able to gain an understanding of the phenomenon under investigation, to make relevant recommendations towards improved consequence management aimed at addressing corruption within the South African Local Government Public Sector and to develop various recommendations to improve public sector accountability and consequence management.

#### **4. Discussion**

#### **4.1 Legislation for good governance**

According to the White Paper on Local Government [13], 'a developmental municipality should play a strategic policy-making and visionary role and seek to mobilise a range of resources to meet basic needs and achieve developmental goals'. The developmental duties of local government are set out in Section 153 of the Constitution, namely that a municipality must structure and manage its administration, budgeting and planning processes to prioritise the basic needs of the community and to promote its social and economic development [9]. In addition, Sections 152, 153 and 154 of the Constitution indicate that local government must promote social and economic development, a safe and healthy environment, and encourage the involvement of communities and community organisations in the matters of local government [9]. Section 152 of the Constitution determines that local government is responsible for:


Section 195 stipulates that public administration must be governed by the democratic values and principles enshrined in the Constitution, including that a high standard of professional ethics must be promoted and maintained. According to the section, all three levels of the state, including public enterprises and state-owned entities, are subjected to the principles and values of a democracy [9]:


The following legislative frameworks and guidelines as per the National Treasury Guideline for Accounting Officers underpin corporate governance in the public sector [15]:

