Governance and financial health risk in an emerging economy’s public sector

  • Published April 5, 2017
  • Author(s)
    Shewangu Dzomira
  • DOI
    http://dx.doi.org/10.21511/pmf.06(1).2017.09
  • Article Info
    Volume 6 2017, Issue #1, pp. 83-87
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    3 articles
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Public sector financial health coupled with good governance is an indispensable ingredient of the growth route of any particular nation. The financial health antecedents in the public sector include under-spending of capital budgets, going concern and debt management. The study seeks out to scrutinize governance and financial health in an emerging country’s public sector. The study has been directed by the two theories namely, Agency theory and Stewardship theory. Governance hassles may take place in relation with numerous principal-agent affairs as well as stewardship matters. This study is centred on an interpretative philosophy which observed evocative and emblematic content of qualitative data from 24 General Reports on The Provincial Audit Outcomes for the three periods (2012-2013; 2013-2014 and 2014-2015). The findings suggested that most of the provinces have shown a lapsed or little progress in the sufficient monitoring and oversight of the cash flow, capital expenditure and debt management processes at a number of agencies and departments. This resulted in almost all the monies payable to the provinces not collected, capital projects not appropriately managed, suppliers not paid on time, and cash shortfalls to bring on the service delivery targets. The study concludes most of the provinces have revealed that there are no improvements towards minimization of financial risk indicators. It is recommended that public sector agencies leadership must continue to monitor the implementation of revenue collection, effective budget and cash-flow management to ensure that funds are utilized for their projected purposes and the entire monies due are recovered. This will add to improved fiscal health, going concern and service delivery in the public sector.

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    • Table 1. Analysis by province
    • Table 2. Analysis by financial risk indicator
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Public and Municipal Finance
Public and Municipal Finance