Audit outcomes and their role in clean administration in municipalities within Limpopo Province, South Africa: a deterrence theory approach

Abstract

In a period of three months subsequent to the end of every municipal financial year, the Auditor General of South Africa (AGSA) receives financial statements from municipalities within which to express various audit opinions which relate mainly to financial affairs. This paper is merely a legislative compliance exercise rather than one seeking to correct the status quo by attaching punitive measures to officials found to be responsible for non-conforming transactions. To sustain its argument, the paper uses the Deterrence Theory. The paper further argues that the use of punitive measures particularly in the recommendations by AGSA could serve to deter poor financial management and misuse of municipal funds. It could further assist in strengthening accountability and enhance municipal service delivery. The paper adopts a Content Analysis method to interrogate Audit Outcomes of Local Government: Limpopo Province to analyse the trends in relation to Audit Outcomes for the financial years ranging from 2011-12 to 2013-14.