Abstract
The weak control environment in South Africa’s public sector has, in the past, resulted in high levels of irregular, fruitless and wasteful, and unauthorised expenditure. In order to make a contribution to the discourse of mechanisms that could be deployed to reduce high levels of irregular, fruitless and wasteful, and unauthorised expenditure, this study analysed the capabilities of the human capital deployed in South Africa’s public sector. Together with the National Treasury in the Office of the Accountant General, a questionnaire was designed and administered to the public institution’s Chief Risk Officers in the first quarter of 2017. The findings of the study are that inadequate risk management processes and ineffective practices that are partly responsible for the weak control environment in public institutions, could also be attributed to the capabilities of the human capital deployed in enterprise risk management functions. In this regard, the study found that some of the reasons for the inadequate risk management processes and ineffective practices stemmed from: the inadequate staffing of the enterprise risk management function; positions not being filled by candidates with adequate academic qualifications and experience; the time it takes to fill a vacant position; and inadequate budget allocations. When institutions address risk maturity, policies, processes, and practices, focus must simultaneously be directed to the human capabilities deployed within the risk management function.
Highlights
The Organisation of Economic Cooperation and Development (OECD, 2009) contends that the widespread failure of organisations to perform enterprise-wide risk management by managing risks across their organisations contributed immensely to the 2007/8 global financial meltdown
South Africa was chosen because the Auditor General of South Africa, had in previous reports, consistently criticised the public sector for its inability to reign in irregular, fruitless and wasteful, and unauthorised expenditure (Auditor General South Africa (AGSA) (2014; 2015; 2016)
Related literature has largely found that risk management processes are inadequate and that the practices applied are ineffective, for these studies’ recommendations for improvement
Summary
The Organisation of Economic Cooperation and Development (OECD, 2009) contends that the widespread failure of organisations to perform enterprise-wide risk management by managing risks across their organisations contributed immensely to the 2007/8 global financial meltdown (financial crisis). For a programme to operate in the way in which it was intended to operate, three important pillars have to hold, namely systems, processes, and people In this regard, related literature on the reasons for the weaknesses in an organisation’s risk management programme seem to have focused more on the adequacy of risk management processes and the risk management systems that are in place, discounting the role and the capacity of human capital. This study provides a different approach to the traditional approach of processes and practices It analyses the capabilities of the human capital placed in the enterprise risk management (ERM) function. An analysis and interpretation of findings is provided, and the conclusion is presented
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